For the railroads, the establishment of Wall Street
For a number of reasons, business enterprise in NewYork grew by leaps and bounds between 1825 and 1860.New York’s growth between the years 1825 and 1860 can be attributed to a number of factors. These include but cannot be limited to theconstruction of the Erie Canal, the invention of the telegraph, the developed of the railroads, the establishment of Wall Street andbanking, the textile, shipping, agriculture and newpaper industries, thedevelopment of steam power and the use of iron products.On October 26, 1825 the Erie Canal was opened.
The canal immediatelybecame an important commercial route connecting the East with the Ohioand Mississippi Valleys. With tht time of travel cut to one-third andthe cost of shipping freight cut to one-tenthof the previous figures,commerce via the canal soon made New York City the chief port of theAtlantic.The growing urban population and the contruction of canals,railroads and factories stimulated the demand for raw materials and foodstuffs.In 1836 four-fifths of the tonnage over the Erie Canal camefrom western New York (North, 105).Much of this cargo was in the formof agriculture goods. The farmer become a shrewed businessaman of sorts as he tended toproduce whatever products would leave him the greatest profit margin.
The rise of the dairy industry was by far the most significantdevelopment in the agricultural history of the state between 1825 and1860. Farmers discovered that cows were their most relliablemoney-makers, since both the domestic and foreign market kept demandingmore dairy products (Ellis, 273). Price flucuations became increasinglyimportant for the farming population between 1825 and 1860. Prices rosefrom the low level of the early 1820’s until the middle 1830’s and thefarmer’s shared in the general prosperity (271). Although the rapidindustrialization and urbanization of New York had a great deal to dowith the success of agricultural markets sporadic demand from aboard asa result of the Irish famine, the Crimean War and the repeal of theCorn Laws in England also contributed(North, 141).
During this periodOhio, Pennsylvania, New York and Virginia, in that order were theleading wheat growing states. Between the years 1840 and 1850 New Yorkranked first in the production of beef. The absence of politic party differences on issues related to the thegrowth of democracy existed in regard to the foremost economicquestions, there was absolutely no partisan division evident in themovement to incorporate new financial institutions; rather , the primaryfactors , which the legislators examined, concerned value, feasibility,profit and the location within the state. Dozens of turnpike proposals,most of which werebacked by the Republicans, passed the legislature; butthe Federalists cooperated, seeing the chance for profits.
ProminentFederalists like John Rutherfurd, John Neilson, William Paterson, JohnBayard, and James Parkerinvested susstanial sums in the turnpikebusiness. There were numerous Republicans who were also vitallyinterested in the turnpike business (Kass, 150).Bipartisan supportalso accompanied plans for the construction of bridges and canals.All of the parties contained a large number of adherents from from everylevel of economic well-being in society. This helps to expain theabsence of any clear-cut party differences on the major economic issuesof the such as the chartering of banks, the protestive tariff, internalimprovements, the development of manufacturing, and the promotion ofsuperior agricultural techniques. Each politcal faction had segmentsboth pro and con on most of these questions, and, inall cases it wasopprtunism, the desire for profits, which was decisive in determiningone’s political position on these economic issues(175).
New York’s economic growth can also be attributed to the invention ofthe cotton gin. Cotton had become a boom crop in the south, however,plantation owners were either too engrossed in the production of theircrops or too unschooled in business techiniques to handle itsdistribution. Some just did not want to be bothered.
This opened theedoor for agents representing New York shipping firms who were only toohappy to help them out – for a fee. This scheme not only earned the NewYork merchants a handsome profit but also solved the problem thatwithout cotton the ship owner would be hards preesed to find adequatecargoes for their return voyages. And so it came about that New York inthe nineteeth century became the nation’s foremost shipper ofcotton(Allen, 108-109).
The cotton shipments entering New York harborwere brought to textile mills for processing.A group of New yorkcapitalist estashlished the Harmony Cotton Manufacturing Company inCohoes. A heavy investment of capital caused the rapid growth of thefactory system, which was mass production with integration of processesand produced a high quality cotton cloth as well as othertextiles(Ellis, 266).
This set the scene for an industrial society by widening the market,manufacturing increased rapidly throughout this period, althoughdevelopment varied enormously from industry to industry. Oftendevelopments were due to improvements in technical processes such asthe adoption of steam power and the use of anthracite coal instead ofcharcoal by the iron industry.The metallurgical industries emplyedthousands for skillful workers who produced a variety of iron and steelproducts, such as farm machinery, pistols, sewing machines, clocks andstoves. These products were being produced using standard parts andmultiple quantities(267). The iron industry made rapid progress as aresult of this processas well as the expansion of the railroad industrywhich created increased demand for iron products. It can therefore besurmized that often growth in a one industry would cause increaseddemand for another industry’s product, hence the boom of bothindustries.
The growth of manufacturing was the main impetus toexpansion , the industrial base broadened during this period,reflecting the overall improvement in factor endowments formanufacturing. Equally important was the cost decline intransportation, which opened up new sites for manufacturing developmentand reduced transport costs for existing firms (North, 208).Production increases required a retail market.In November of 1858,R.H. Macy established a department store in New York City successfullyimplementing a fixed price policy on a large scale developed by smallNew York stores since 1840 establishing a n American retail sales custom(Spann, 125).Some additional elements that should mentioned include the founding ofthe New York Tribune by Horace Greely, the development of the telegraphby Samuel Morse, the colaboration of six New York newspapers who joinedto pay telegragh costs of foreign news relayed from Boston, and theestablishment of a New York clearinghouse to facilitate bankingoperations.
Research reveals that the reasons for the success of New York’s businessenterprise between 1825 and 1860 were enumerous with no reasonweighting more heavily than another with the exception of as Ellisstates that, “Plank roads, railroads, canals, steamships-all hadrevolutionary effects on the economy of New York. The predominatelyself-sufficent farmer of pioneer days was gradually tramnsformed into aspecialized commercial farmer sensitive to every shift in the markets.The isolation of many rural communities was breaking down as citzensandgoods flowed freely in and out. Merchants in both the upstae andmetropolitan region, recognizing the crucial role of canals andrailroads, looked with satisfaction upon the finest and most activelyexpanding transportation network in the country.
New York grew steadilyin population, wealth, and trade largely to the splendid system of waterand rail transportation promoted by its citizens in this period.”, butall entwinding to create a boom of business expansion during thisperiod. It appeared as if we were developing not only as a state but asa civilized nation whenever this development would be curtailed by theonsloat of a civil war. Works CitedAllen, Oliver E. New York, New York: A History of the World’s MostExhilarating and Challenging City. New York: Macmillan, 1990.
Ellis, David M., et al. A History of New York State.
Ithaca: CornellUP, 1967.Kass, Alvin. Politics in New York State, 1800 -1830.
Syracuse:Syracuse UP, 1965.North, Douglas C. The Economic Growth of the United States, 1790-1860.New York: Norton, 1966.
Spann, Edward K. The New Metropolis: New York City, 1840-1857. NewYork: Columbia UP, 1981.