ECONOMIC GROWTH IN THE NORTH AND SOUTH 1800-1860, Before the Civil War

USI.27 Explain the importance of the Transportation Revolution of the 19th century (the building of canals, roads, bridges, turnpikes, steamboats, and railroads), including the stimulus it provided to the growth of a market economy. (H, E)

Steamboats

  • In the beginning of the 19th century, a transportation revolution was establish in the United States. There were improvements in roads, the development of steamboats and the building of canals and railroads, rapidly diminished western isolation. Rafts and riverboats continued to carry bulky agricultural products downstream, the steamboats easily moved against the current, and transportation costs for goods going upstream dropped.
  • Westerners were able to find eastern and foreign goods in local stores, the price of these products no longer burdened by high transport costs. Still those who lived a distant from the rivers were isolated. Roads were expensive because their builders charged high tolls to cover building costs and they quickly deteriorated. It would take canals and railroads, rather than roads, to open interior regions.

Man-made Canals

  • The Erie Canal opened in 1825 and it initiated a canal-building frenzy in both the East and the West. By 1840 the United States had over three thousand miles of canals. Like the Erie, which ran from the Hudson River to Lake Erie, these artificial waterways linked interior areas to non-natural waterways, providing transportation facilities to places far from navigable rivers and lakes.
  • Most of the canals were not commercially successful because they were hastily built at great expense and often inadequately maintained. These problems, however, might have been overcome had the canals not faced competition from a new, more efficient, and faster form of transport.

Railroads

  • Railroads became the next great breakthrough in transportation. They could reach interior areas where an inadequate water supply or rough terrain made canals impossible. Railroads ran year-round, and they could easily ascend and descend hills and mountains. Initially financed by municipal governments and enterprising businessmen in river, lake, and ocean towns and cities, the first railroads extended short distances into the interior to tap potential markets in the surrounding countryside.
  • Extension and connection of short lines soon provided uninterrupted transportation over long distances. By 1840, the United States had almost three thousand miles of track; by 1860, a network of thirty thousand miles linked most of the nation's major cities and towns.

Market Economy

  • Transportation innovations cut the costs and increased the speed of moving goods which helped create a national market. Westerners became important commercial producers and consumers of goods imported goods. These commercial opportunities drew masses of easterners and immigrants into western lands and stimulated the growth of marketing as well as manufacturing towns and cities.
  • The movement of goods over long distances required a supporting infrastructure, stimulating the growth of market towns in which merchants, bankers, warehousemen, wholesalers, retailers, and other middlemen handled goods and provided the services necessary to move them from producers to consumers.
  • More extensive markets increased competition and innovation as manufacturers, no longer saddled with high transportation costs, sought to produce a better and cheaper product in order to capture a larger share of the market.
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