F O R G I N G T H E N AT I O N A L E C O N O M Y :

1 7 9 0 - 1 8 6 0

C H A P T E R 9

A P U S H I S T O R Y

LESSON OBJECTIVES:

• Students will be able to

– Identify the causes of westward migration

following the War of 1812.

– Explain the rise of the market economy and

how this change affected where Americans

lived and how they were living.

– Describe the rise of industrialization.

– Evaluate the reasons for the increases in

urban poverty during this period.

– Explain how the market economy and

industrialization altered and influenced

familial and community relationships.

GRADING RUBRIC:• For this lesson, you will be graded using the following rubric:

Points Earned: Explanation:

3Student clearly explains the reasons for the growth of the market economy, providing and explaining at least 3 examples of transportation changes that would further the market economy.

2Student explains the reasons for the growth of the market economy and supports his/her explanation by identifying at least 2 examples of transportation changes that would further the market economy.

1Student somewhat explains reasons for the growth of the market economy; however the student could only identify at 1 examples of a transportation change that would further the market economy. Discussion of this change was minimal.

0Student did not submit a writing assignment or could not explain a reason for the growth of the market economy by identifying or explaining an example of transportation changes that would further the market economy.

WORKING THE LAND: THE AGRICULTURAL BOOM

• The removal of the Indians and the high prices escalating

demand for wheat and corn drew more settlers than ever

into the Old Northwest.

• What increased the land grab in the Old Southwest?

– Eli Whitney’s cotton gin (1793)

– The boundless need of the British textile industry for

raw cotton

• After the War of 1812

– Southeasterners poured into Alabama and Mississippi

– What effect does this have?

• INCREASE the prices of land

• TRIPLING the nation’s cotton production

• Cotton will account for 66.6% of America’s foreign

export by 1836!!!

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• High crop prices after the War of 1812 tempted more

farmers than ever to switch from subsistence farming to

commercial agriculture!

• Commercial agriculture will open up new opportunities

for Western farmers.

• Does this truly benefit these farmers?

– NO! This practice will open them up to GREATER

risks!

– Many will have to borrow money to buy lands

– This was necessary to survive until the first

commercial crops arrived!

• Could the farmers work their way out of debt?

– YES! HOWEVER – this was difficult because the debt

made these farmers vulnerable to the fluctuations in

price, supply, and demand in world markets.

FEDERAL LAND POLICY

• How did land policy impact America?

– Jeffersonian Republicans introduced land policies

aimed at a speedy transfer of the public domain to

the FARMERS!

– Between 1800 and 1820, the government cut the

minimum price per acre.

– The minimum number of acres that could be

purchased was also reduced.

• How does this work for America?

– Most of the government land was sold at auction

– Speculators often bid the prices UP (far above the

minimum pricing)

• What ENCOURAGED speculation?

– The easy availability of credit!

THE SPECULATOR AND THE SQUATTER• How do squatters enter this picture?

– Poor settlers who did not have the money to buy at

auction simply squatted on government lands.

• What power did Squatters have here?

– They exerted pressure on Congress to grant them

preemption rights over speculators.

– Were they granted rights? YES – 1841

• What type of agriculture will squatters practice?

– COMMERCIAL – this is chosen to gain enough

money to purchase their existing lands from the

government.

• What is the reality?

– After exhausting the soil’s fertility growing cash

crops, the squatters often moved on to new lands.

THE PANIC OF 1819• How do we define a panic?

– A sudden, widespread alarm concerning finances,

often resulting in a rush to SELL!

• What caused this panic?

– The land boom collapsed and crop and western

land prices DROPPED

– Speculators were ruined

• Did this lead to a depression?

– YES! The Depression of 1819

• How did the nation respond?

– The National Bank tightened credit

– Called in the notes of the overextended western

banks

• How does this impact the nation?

– The hard times experienced by agriculture and

industry had a long-term political effect!

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• Before 1820:

– available transportation

facilities were

unsatisfactory

– Existing roads were

adequate for transporting

people – NOT goods

– Bulky load with horse-

drawn wagons moved

slowly and cost a great

deal

– The rivers west of the

Appalachian Mountains

flowed north to south.

• Beginning in 1820:

– The nation experienced a

TRANSPORATION

REVOLUTION!

STEAMBOATS, CANALS, AND RAILROADS:

• How did river transportation change?

– 1807: Robert Livingston and Robert

Fulton introduced the steamboat (the

Clermont)

– Livingston and Fulton gained a

monopoly on ferry services between

New York and New Jersey.

– Rivers became a ‘two-way street’ for

commerce

– Steamboats altered the way that travel

happened

• Gibbons v. Ogden: Congress could

regulated interstate commerce in

navigation!

– State granted monopolies collapsed!

– From 1817 to 1855: steamboats

operating on western rivers increased

from 17 to 727! Making travel easier.

• Steamboats assume a vital role along the

Mississippi-Ohio river system.

– Before these vessels, keelboats (covered flatboats)

were used.

– These were difficult to use because you had to

push them with oars.

– It would take a keelboat 3-4 months to make the

journey to New Orleans.

– A steamboat could make the trip in 25 days!

• Steamboat passengers travelled in luxury!

– Cabins and lounges were available.

– Skylights, chandeliers, and velvet-upholstered

furnishings were used.

• What would replace roads and turnpikes as the focus of

investment? Canals!

– The cost of canal construction was considerably higher!

– Canals offered the chance to connect the Mississippi-Ohio

river systems and the Great Lakes with eastern markets.

– Canals could reduce shipping costs between $.20 and $.30 a

ton per mile. (this cost savings would lessen over time.)

• The Erie Canal:

– Constructed between 1817 and 1825.

– Connected the Hudson River with Lake Erie.

– Produce from the Ohio could reach New York City along a

continuous stretch of waterways.

– This canal’s completion began the canal boom of the 1820s

and 1830s.

• What ended canal projects? An economic depression in the mid

1830s.

• What is replacing the canals? RAILROADS!

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RAILROADS AND AMERICA:• In 1825: The world’s first commercial railroad began

operation in ENGLAND!

• How did this move impact America?

– By 1840: Americans had laid some 3,000 miles of

track (roughly equivalent to the total mileage of

canals)

– Cities lacking major water connections turned to

railroads to gain a share on the western market.

• Is there an advantage to a railroad or a canal?

– Railroads had significant advantages!

• Cheaper to construct than a canal!

• Could achieve a faster speed.

• Could reach more markets.

– Early railroads ran between cities in the East.

– More passengers were carried than freight.

WHICH IS BETTER: CANALS OR RAILROADS?

CANALS:

• Canals had been

constructed by state

governments.

• Expensive to construct

– cheap to maintain.

• Lasted for decades.

• Transport prices

remained low.

RAILROADS:

• Most railroads were

constructed by private

corporations seeking

quick profits.

• Cost-cutting measures

were used in

construction: expensive

to maintain.

• Transport prices were

higher than canals.

Prompt:

In a well-written paragraph, explain how transportation

changes would increase the growth of the market economy in

the United States from 1790-1860. Cite specific examples to

support your answer.

Points Earned: Explanation:

3Student clearly explains the reasons for the growth of the market economy, providing and explaining at least 3 examples of transportation changes that would further the market economy.

2Student explains the reasons for the growth of the market economy and supports his/her explanation by identifying at least 2 examples of transportation changes that would further the market economy.

1Student somewhat explains reasons for the growth of the market economy; however the student could only identify at 1 examples of a transportation change that would further the market economy. Discussion of this change was minimal.

0Student did not submit a writing assignment or could not explain a reason for the growth of the market economy by identifying or explaining an example of transportation changes that would further the market economy.