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-1814]

Westward migration.· Transition

689

stimulated by the opportunities of the neutral trade during the period of the European wars. Domestic manufactures were in a fairly flourishing condition, and helped to supply both the home and the Southern market. Little advance, however, had been made in the introduction of mechanical processes, while the factory system was nearly unknown. In the main, all luxuries and many of the necessities which could be easily transported were imported from England. There was little to encourage capital to compete with the powerful industries of England, especially in view of the fact that the opportunities for its employment in agriculture and shipping were in any case any case more

attractive.

In the meantime that movement toward the settlement of the West, which for a century was to be the controlling factor in economic development, but whose effects at this early period were scarcely felt, had already begun. Ever since the Revolution, the migration of the pioneers beyond the mountains had been going on; and by 1800 about one-tenth of the population, roughly 500,000 in number, had moved into the Western territory. Settlers had penetrated the wilderness of western New York and of western Virginia; but the chief stream of migration had gone from Virginia into Kentucky and Tennessee till it had reached the Ohio river and its tributaries. This population, for the time being, consisted of hardy pioneers practically shut off from close commercial connexion because of the great difficulties of conducting trade across the mountains, and the necessity on their own part of devoting all their energies to self-preservation. Nevertheless they increased rapidly year by year.

The course of economic development at this time was but a continuation of the colonial period. There was a considerable degree of widespread comfort, leading to a rapid increase in population, about 35 per cent. to the decade; but there were no important changes in the nature of the economic life or in the relations of its various groups. More people were simply making more things in the same way. Before long, however, a marked change began; and the second war against England may be taken as a convenient line of demarcation between the two periods. The transition may be described as that from the period of homogeneous expansion to the period of organic growth; and the chief factors to which the change was due were the rise of manufactures, the improvements in transport, and the extension of cotton culture into the South-west, on the one hand; and, on the other, the adoption of a national economic policy which included protection to manufactures, government aid to internal improvements, and a land policy which favoured rapid settlement.

The cessation of foreign trade in the years 1808–9, and again in 1812-14, had forced the nation into an industrial development, which not only was more rapid than before, but also involved a change

C. M. H. VII.

44

690

Industrial changes.

Communications

[1807from the domestic system of industry to the factory system, and the consequent investment of capital on a larger scale. It is not necessary to describe the growth in detail. The single example of the cotton industry, in which the number of spindles in factories increased from 8,000 to 130,000 between 1807 and 1815, will suffice to show that a new period in American industry had begun. The cessation of the war in 1814 brought the new manufactures into direct competition with the older industries of Great Britain; and the natural result was that some degree of protection was considered necessary to their maintenance. A tariff with some protective features had been adopted in the first year of the Constitution; but, since there had been few manufactures to protect in the early period, the real beginning of the protective policy of the United States may be said to date from the tariff of 1816. This Act provided for a moderate measure of Protection, which was subsequently increased by the Acts of 1824 and 1828.

This rise of manufactures was accompanied by a growing activity on the part of Eastern merchants in the Western territory, and would have provided an increasingly important market for Western produce but for the grave difficulties of transport. There was practically no route for commerce except the mountain trail, which could not be utilised for the bulky products of the West. At the same time the roads in the sea-coast States were in a desperate condition. Many proposals had been made for turnpike and canal improvements; and Gallatin's famous report (1807), providing for an elaborate system connecting all sections of the country, was an expression of the popular feeling of the time. It was not till after the war of 1812 that any serious beginnings were made; but, during the next twenty years, the progress of improvements in internal communications was an important factor both in politics and commerce. The problem of the moment was to secure facilities of transport which should bring the farming sections of the East into connexion with their own rivers, unite the traffic of the Eastern river districts, connect Eastern rivers with those west of the mountains, and develop a system of Western waterways by connecting the Lakes with the Ohio and the Mississippi, while branch canals led to the interior farms. Such enterprises required a far larger capital than was available in the home money markets; and extensive borrowing from England became necessary. The credit of the home companies, however, was insufficient for such purposes; and the only solution was the issue of State bonds or grants from the Federal government in support of the necessary improvements. Government aid was therefore resorted to in support of nearly every enterprise of the kind; and the contributions of the State governments were, in view of the resources of the time,

enormous.

The demand for such improvements was especially strong in the West; and the reason of this can be easily understood. Soon after

-1828] The needs of the West.

The cotton industry

691 the close of the war the population west of the mountains had reached a total of 2,000,000. The settled area included, besides Kentucky and Tennessee, a large part of Ohio, southern Indiana, and Illinois. Between these districts and the great Lakes lay a vast region, still unpenetrated save by the Indian trader, while to the South the region between central Georgia and Louisiana was still wilderness; but a great wedge of settlement had been thrown out, which, stretching from Lake Erie to the Tennessee on the east, and following the great valley of the Ohio westward, had split the wilderness in halves. The Mississippi had been crossed, and a settlement already existed at St Louis, near its junction with its great western tributary, the Missouri. At the mouth of the river lay New Orleans. Despite the surrounding stretches of wilderness, the strategic points for the exploitation of the West had now been occupied. And yet the prospect before the Western people was not entirely encouraging. Their chief need was a market for their increasing products; and their only outlet was by export from New Orleans. Notable as this trade was, in view of the conditions of the time, it involved, besides a sea-voyage after the Gulf was reached, a long river-voyage in flat-boats with no possibility of a return cargo upstream. For the time being their natural waterways did not connect them with a home market, while the natural market of the Eastern States behind them was shut off by the mountains. That the problem of transport should seem to them all-important is not surprising.

This problem, however, was not to be adequately solved by the system of internal improvements which now began to be carried out. The great Erie Canal was opened in 1825. It connected the lake region with the Atlantic by way of the Hudson river, and at once opened the Eastern markets to northern Ohio; but the great body of settlers were too far south to make connexion with this route practicable. Before the Ohio river could be successfully connected with the seaboard, the Alleghanies themselves had to be crossed; and no canal enterprise proved equal to the problem. In the meantime, however, new factors entered into the situation, which made the question of the Eastern market less important. The rivers flowed west to the Mississippi; and there was needed only a market at the river's mouth to give the necessary stimulus to Western agriculture. This market now began to appear through the rapid settlement of the South-west.

It seems to-day a strange fact that, though England had imported cotton from the East before Jamestown was founded, yet Virginia had been an English colony for a century and a half and, with the other colonies, had achieved independence, before cotton was exported to the mother-country. The total production of cotton in the United States in 1790 was only 1,500,000 lbs.; but in 1810 this had increased to 85,000,000 lbs. Down to this time the production had been confined

692

Cotton.

Steam navigation.

Land

[1809

to the Atlantic States; but in the next decade the continued foreign demand led to that great increase in production which was to afford an unique instance in history of a great region entirely dependent on a single crop, and the world dependent on that region for its supply; it also led to that rapid settlement of the South-west which was to increase so greatly the area of slave labour, and the power of the slaveholding class. By 1820 the river valleys of Alabama, Louisiana, and Mississippi were already well settled; and the population of the three States had risen to over 350,000.

This extension of cotton culture was of immense importance to the West, since it built up the much-needed market at the end of river navigation. And that navigation was itself immensely facilitated at the same time by the successful introduction of the steamboat on the Ohio. Only two years after the Clermont made her famous voyage from New York to Albany in 1809, a steamboat started on the long voyage from Pittsburgh to New Orleans. It was not, however, till some years later that the steam navigation of the Western rivers became commercially important. Under these new conditions the real development of the West began. The towns along the Ohio and Mississippi flourished as never before. Pittsburgh became the distributing centre for merchandise to the West, and New Orleans the great receiving port for Western corn and provisions, since more than ever the Cotton States devoted their whole energies to the one great staple.

About the same time the land policy of the United States began to adopt the character which it has subsequently maintained, and which has been of great importance to the country's progress. The course of this policy and the growth of the public domain have been described elsewhere in this volume; and it is only necessary here to point out the manner in which the new tendencies co-operated for the stimulation of national development. The early theory regarding the public domain was that it should be used as a vast government property for fiscal purposes. The idea of some European historians, that the policy of Hamilton was adopted under the conscious influence of capitalistic interests, in order to prevent the labourers from acquiring farms and thus keep the price of labour high, is simply a fanciful interpretation of the facts, due to the effort to reduce all history to some arbitrary theory of class struggle. There was doubtless a feeling in some quarters that the development of the country might be retarded by encouraging a continuous decentralisation of the population; but the land policy that was actually carried out was dictated by purely fiscal motives. The change to a more liberal policy was due to the popular demand for land, and showed the growing influence of the West. By 1820 the minimum unit of purchase had been reduced to eighty acres ; and the price was in that year reduced to $1.25 per acre. In the following years the pre-emption idea was becoming practically operative; and the

-1841]

Difficulties of the West

693

temporary Act of 1830 and the permanent Pre-emption Act of 1841 were merely legal declarations of a right that had been generally granted. Though there was some justification of the fiscal policy at the time of its adoption, a more far-sighted statesmanship would have perceived that ultimately even the financial position of the government would be more strengthened through the permanent settlement of the domain by tax-paying farmers than through its sale to speculative companies.

Such were the natural conditions and the lines of public policy determining the course of national development in the quarter of a century following the war of 1812. Much criticism has been directed against some features of the policy adopted; but it must be judged as a whole. When we recognise the nature of the problem - the difficulties which obstructed the development of an economic system capable of exploiting the resources of a vast territory, and the fact that the very vastness of the country, combined with insufficient transport, was a temporary source of weakness, as tending to produce an isolated development of separate sections we must admit that, however futile or extravagant the support of internal improvements may in some cases have been, however unreasonable and one-sided some of the Tariff Acts, the general line of national policy was broadly and wisely conceived.

Despite the growing prosperity, there were nevertheless elements of weakness which made the development of a strong national life still doubtful. The country was now divided into three sections. The New England and Middle States east of the Alleghany Mountains, rapidly developing on industrial and commercial lines, were far removed in character and sympathy from the Cotton States, with their expanding plantation and slave system, and were not yet commercially joined with the new West. Even the extension of canals to the West, although it brought the products of western New York and the shores of Lake Erie to the Hudson, did not overcome the dependence of the great valley of the Ohio on the Southern market by way of the Mississippi and New Orleans. The East sold to the West but did not buy from it; and, though there was a natural division of labour among the three sections, there was not such a system of mutual exchange as would most closely bind them together. The West, which should naturally have been in the closest interdependence with the East, was being bound more and more closely by commercial interest to the South; and the continuance of this process would have been inevitable had conditions remained the same while Iowa and the Missouri valley were being colonised. Had the great struggle of the Civil War arisen in such circumstances, the Middle-west might possibly have sided with the South.

The great event which was to change this geographical situation and determine entirely anew the lines of economic development was the introduction of the railroad. It is not necessary to enlarge upon the

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