This article is part of a series on the
Economy of the United States
Economic history Agricultural history Banking history Petroleum history Shipbuilding Industrial Revolution in the United States History of the United States dollar Lumber history Tariff History United States dollar § History History by state
Sectors Primary sector Agriculture Energy Petroleum Electricity Mining Fishing Forestry Water and sanitation Secondary sector Automotive Iron and steel Pulp and paper Tertiary sector Social programs Transportation Tourism Education Gambling Healthcare Insurance Financial services Central bank Banking Largest banks Stock exchanges Largest companies Companies listed on the NYSE
Economy by state California Texas New York Florida more... State statistics State budgets State credit ratings State unemployment rate Union membership
Economy by city or county Allentown Atlanta Buffalo Chicago Cleveland Columbus Detroit Door County Erie Houston Indianapolis Kansas City Lexington Long Island Louisville Memphis New York City Norfolk Omaha Philadelphia Phoenix Pittsburgh Salt Lake City San Diego Spokane St. Louis Stamford Youngstown Washington, D.C.
Labor Labor Law Child labor Labor unions Minimum wage Right-to-work law Employment Unemployment (Causes)
United States portal
v t e

In the United States from the late 18th and 19th centuries, the Industrial Revolution affected the U.S. economy, progressing it from manual labor, farm labor and handicraft work, to a greater degree of industrialization based on wage labor. There were many improvements in technology and manufacturing fundamentals with results that greatly improved overall production and economic growth in the U.S.

The Industrial Revolution occurred in two distinct phases, the First Industrial Revolution occurred during the later part of the 18th century through the first half of the 19th century and the Second Industrial Revolution advanced following the American Civil War. Among the main contributors to the First Industrial Revolution were Samuel Slater's introduction of British industrial methods in textile manufacturing to the United States, Eli Whitney's invention of the cotton gin, Éleuthère Irénée du Pont's improvements in chemistry and gunpowder making, and other industrial advancements necessitated by the War of 1812, as well as the construction of the Erie Canal, among other developments.^[1][2]

As Western Europe industrialized in the mid-to-late 1700s, the United States remained agrarian with resource processing, gristmills, and sawmills being the main industrial, non-agrarian output. As demand for U.S. resources increased, canals and railroads became important to the economic growth as transportation necessitated and the U.S. population was sparse, especially in areas where resources were being extracted such as the American frontier. This made it necessary to expand technological capabilities, which led to an Industrial Revolution in America as entrepreneurs, businesses competed with and learned from each other to develop better technology, fundamentally altering the U.S. economy. Some technologies that advanced the Industrial Revolution in the U.S. were appropriated from British designs by ambitious British entrepreneurs hoping to use the technology to create successful companies in the U.S.^[3][4][5]

Much of the Industrial Revolution in the U.S. originated in the Lehigh Valley region of eastern Pennsylvania, where anthracite coal, iron ore, steel, textile, and industrial sectors experienced breakthroughs and emerged as global manufacturing leaders.^[6]

One entrepreneur who is most associated with starting up the textiles industry in the U.S. and who initially brought the textile technology to the U.S. was Samuel Slater. Slater learned that Americans were interested in textile techniques used in England, but since exporting such technical designs were illegal in England, he memorized as much as he could and departed for New York City.

Moses Brown, a leading Rhode Island industrialist, secured the services of Slater, with Slater promising to recreate British textile designs. After an initial investment by Brown to fulfill initial requirements, a mill successfully opened in 1793 being the first water-powered roller spinning textile mill in America. By 1800, Slater's mill had been duplicated by many other entrepreneurs as Slater grew wealthier and his techniques more and more popular with Andrew Jackson calling Slater the "Father of the American Industrial Revolution". But Slater also earned the pejorative "Slater the Traitor" from many in Great Britain who felt he betrayed them in bringing British textile techniques to the Americas.^[7][8]

With the invention of the cotton gin by Eli Whitney in 1794, American slaveholders had the means to make cotton production significantly more profitable. The era of King Cotton was underway by the early 1800s to such an extent that by the mid-19th century, southern slave plantations supplied 75% of the world's cotton. The introduction of the cotton gin was as unexpected as it was unprecedented. British textiles had expanded with no change in ginning principles in centuries. For the American planter class, up front costs were higher but productivity improvement among their slaves were clear and Whitney's original 1794 gin design was copied by many and improved upon.^[9][10]

The du Pont family emigrated to the United States due to repercussions from the French Revolution, bringing with them expertise in chemistry and gunpowder. E.I. du Pont observed that the quality of American gunpowder was poor, and opened Eleutherian Mills, a gunpowder mill on Brandywine Creek in 1802. The mill served as home for du Pont's family as well as a center of business and social life, with employees living on or near the mill. The company grew rapidly and by the mid-19th century had become the largest supplier of gunpowder to the United States military.^[11][12]

In the late 1700s, Robert Fulton of Pennsylvania proposed plans for steam-powered vessels to both the United States and British governments. Having developed significant technical knowledge in both France and Great Britain, Fulton returned to the United States, working with Robert R. Livingston to open the first commercially successful steamboat operating between New York City and Albany. Fulton built a new steamboat sturdy enough to take down the Ohio and Mississippi rivers, he was an early member on a commission to plan the Erie Canal, and Fulton designed the first working muscle-powered submarine, the Nautilus.^[13][14]

In the 1780s, the Erie Canal was proposed, then re-proposed in 1807 with a survey being funded in 1808. Construction began in 1817 and the original canal was about 363 miles with 34 numbered locks from Albany to Buffalo. Prior to the Erie Canal, bulk goods were limited to shipping by pack animal, there were no railways and water was the most cost-effective way to ship bulk goods.^[15][16] Use of this new canal was faster than using carts pulled by draft animals and cut transport costs by about 95%.

The canal gave New York City's port a significant advantage over all other U.S. port cities and contributed to a growth in population in New York state and regions farther west.^[17][18] It inspired canals elsewhere, bringing a canal age.

In response to British aggression against the U.S., Congress passed the Embargo Act of 1807. The embargo was a cumulative addition to the Non-importation Act of 1806 (2 Stat. 379), which was a "Prohibition of the Importation of certain Goods and Merchandise from the Kingdom of Great Britain," the prohibited imported goods being defined where their chief value, which consists of leather, silk, hemp or flax, tin or brass, wool, glass, and paper goods, nails, hats, clothing, and beer.^[19]

The prohibition of imports under the Embargo Act resulted in the expansion of new, emerging US domestic industries across the board, particularly the textile industry, and marked the beginning of the manufacturing system in the United States, reducing the nation's dependence upon imported manufactured goods.^[20][21]

The early Industrial Revolution, which lasted into the mid-19th century, was marked by shift in labor, from an outwork system of labor towards a factory system of labor. Throughout this period, much of the U.S. population remained in small scale agriculture.^[22] Despite a small percentage of the population then working in industry, the U.S. government took action to promote the expansion of U.S. industry. An important example is Alexander Hamilton's proposal of the "American School" ideas which supported high tariffs to protect U.S. industry.^[23] This idea was embraced by the Whig Party in the early 19th century with their support for Henry Clay's American System. This plan, proposed shortly after the War of 1812, promoted not only protective tariffs, but also canals and roads to support the movement of manufactured goods around the country.^[24] As in Britain, the First Industrial Revolution in the United States revolved heavily around the textile industry. Early U.S. textile plants were located next to rivers and streams as they would use the running water to power the machinery in the plant. Thus, many of the factories of the First Industrial Revolution were in the Northeastern United States^[25]

To aid the expansion of industry, Congress chartered the Bank of the United States in 1791, giving loans to help merchants and entrepreneurs secure needed capital. However, Jeffersonians saw this bank as an unconstitutional expansion of federal power, so when its charter expired in 1811, the Jeffersonian-dominated Congress did not renew it.^[26] State legislatures were persuaded to charter their own banks to continue helping merchants, artisans, and farmers who needed loans, and, by 1816, there were 246 state-chartered banks. With these banks, states were able to support internal transportation improvements, such as the Erie Canal, which stimulated economic development.^[27]

The Industrial Revolution altered the U.S. economy and set the stage for the United States to dominate technological change and growth in the Second Industrial Revolution and the Gilded Age.^[28] The Industrial Revolution also saw a decrease in labor shortages which had characterized the U.S. economy through its early years.^[29] This was partly due to a transportation revolution happening at the same time, low population density areas of the U.S. were better able to connect to the population centers through the Wilderness Road and the Erie Canal, with steamboats and later rail transport, leading to urbanization and an increased labor force available around larger cities, including Chicago, Philadelphia, and New York City, and labor force shortages elsewhere as workers fled to these highly populated cities. Also, quicker movement of resources and goods around the country drastically increased trade efficiency and output while allowing for an extensive transport base for the U.S. to grow during the Second Industrial Revolution.^[30]

Techniques to make interchangeable parts were developed in the U.S., and allowed easy assembly and repair of firearms or other devices, minimizing the time and skill needed to repair or assemble devices. By the beginning of the Civil War, rifles with interchangeable parts had been developed, and after the war, more complex devices such as sewing machines and typewriters were made with interchangeable parts.^[31] In 1798, Eli Whitney obtained a government contract to manufacture 10,000 muskets in less than two years.

By 1801, he had failed to produce a single musket and was called to Washington to justify his use of Treasury funds. There, he created a demonstration for Congress in which he assembled muskets from parts chosen randomly from his supply.^[32] While this demonstration was later proved to be fake, it popularized the idea of interchangeable parts, and Eli Whitney continued using the concept to allow relatively unskilled laborers to produce and repair weapons quickly and at a low cost. Another important innovator is Thomas Blanchard, who in 1819 invented the Blanchard lathe, which could produce identical copies of wooden gun stocks.^[33]

Interchangeable parts made the development of the assembly line possible. In addition to making production faster, the assembly line eliminated the need for skilled craftsmen because each worker would only do one repetitive step instead of the entire process.^[34]

The first Industrial Revolution had a profound effect on labor in the U.S. Companies from the era, such as the Boston Associates, would recruit thousands of New England farm girls to work in textile mills. These girls often received much lower wages than men, though the work and pay gave young women a sense of independence that they did not feel working on a farm. The First Industrial Revolution also marked the beginning of the rise of wage labor in the United States. As wage labor grew over the next century, it would go on to profoundly change American society.^[35]

• "The Industrial Revolution in the United States", Library of Congress