The Market Revolution

The Market Revolution

The Market Revolution of the nineteenth century radically shifted commerce as well as the way of life for most Americans.

Learning Objectives

Summarize the key technological, political, and geographic factors that contributed to the Market Revolution in the United States

Key Takeaways

Key Points

  • The Market Revolution was characterized by a shift away from local or regional markets to national markets.
  • The agricultural explosion in the South and West and the textile boom in the North strengthened the economy in complementary ways.
  • Eli Whitney 's cotton gin and pioneering work with metal mechanical parts contributed greatly to industrialization.
  • Large-scale domestic manufacturing, concentrated in the North, decreased dependence on foreign imports and resulted in an increase in wage labor.
  • The power of the federal government grew under Henry Clay 's American System, which led to many improvements in the form of expanded roadways and canal systems.
  • The rapid development and westward expansion during the Market Revolution resulted in land speculation which caused economic boom and bust.

Key Terms

  • wage labor: The socioeconomic relationship between a worker and an employer, in which the worker sells his labor under a formal or informal employment contract.
  • American System: A set of manufacturing methods that evolved in the nineteenth century, characterized by a system for making interchangeable parts and a high degree of mechanization that results in a more efficient use of labor compared to hand methods.
  • Eli Whitney: An American inventor best known for inventing the cotton gin.

Introduction: The Market Revolution

The Market Revolution (1793–1909) in the United States was a drastic change in the manual-labor system originating in the South (and soon moving to the North) and later spreading to the entire world. Traditional commerce was made obsolete by improvements in transportation, communication, and industry. With the growth of large-scale domestic manufacturing, trade within the United States increased, and dependence on foreign imports declined. The dramatic changes in labor and production at this time included a great increase in wage labor. The agricultural explosion in the South and West and the textile boom in the North strengthened the economy in complementary ways.

The South and the Cotton Gin

Commercial agriculture and domestic manufacturing became crucial sectors of the American economy. In 1793, Eli Whitney's cotton gin revolutionized the cotton industry in the South. The cotton gin (short for cotton engine) was a machine that quickly and easily separated cotton fibers from their seeds, a job that otherwise had to be performed painstakingly by hand, most often by slaves. Whitney went on to develop muskets with interchangeable parts, a technology employed by northern manufacturers in many different industries.


Eli Whitney on U.S. postage issue of 1940: Eli Whitney's crucial contributions to the Market Revolution created a lasting legacy.

Advancements in the West

Many new products revolutionized agriculture in the West as well. John Deere, for example, invented a horse-pulled steel plow to replace the difficult oxen-driven wooden plows that farmers had used for centuries. The steel plow allowed farmers to till soil faster and more cheaply without having to make repairs as often. In the 1830s, Cyrus McCormick's mechanical mower-reaper quintupled the efficiency of wheat farming. Just as southern farmers had prospered after the invention of the cotton gin, farmers in the West raked in huge profits as they conquered more lands from the American Indians to plant more and more wheat. For the first time, farmers began producing more wheat than the West could consume. Rather than let it go to waste, they began to transport crop surpluses to sell in the manufacturing Northeast.

The American System

The importance of the federal government also grew during this period. Congressman Henry Clay introduced the American System to develop internal improvements, protect U.S. industry through tariffs, and create a national bank. Federal and local governments, as well as private individuals, invested in roads, canals, and railroads. The 1825 completion of the Erie Canal was a tremendous engineering feat and opened the West for trade with markets on the east coast.


Highways of the United States, ca. 1825: Turnpikes, canals, and rail lines drastically changed America's landscape, beginning in the 1800s.

Following the War of 1812, the American economy was altered from an economy partly dependent on imports from Europe to an empire of internal commerce. With a new generation of leaders, the Republican Party came to embrace the principles of government activism and the development of large-scale domestic manufacturing.

Westward invasion into American Indian territory relegated rich new farmlands to the United States. This period of rapid development in the East and expansion in the West produced a wave of land speculation that resulted in economic periods of boom and bust. These periods were characterized by patterns of high market prices followed by ruinously low prices, falling production, and bankruptcies by producers.

Transportation: Roads, Canals, and Railroads

In the nineteenth century, the construction of roads, rails, and canals dramatically improved national mobility.

Learning Objectives

Describe the revolution in transportation in the nineteenth century and its contribution to economic growth

Key Takeaways

Key Points

  • During the first quarter of the nineteenth century, the federal government, state governments, and private investors directed significant resources to the transportation sector.
  • The National Road, or Cumberland Road, was the first highway built by the federal government.
  • The development of the Erie Canal, extending from New York State to the Great Lakes, cut the costs of freight transport by 95 percent and contributed greatly to the wealth and stature of New York City.
  • Though canals offered tremendous advantages over land shipment, they could not compete with the efficiency and flexibility of the railroad.
  • The most prominent early railroad was the Baltimore and Ohio Railroad (B&O), which linked the port of Baltimore to the Ohio River and offered passenger and freight service as of 1830.
  • With improved methods of transportation came the concept of Manifest Destiny; land developers, railroad magnates, and other investors capitalized on westward settlement into American Indian land.

Key Terms

  • Erie Canal: The 363 mile-long canal from the Great Lake of the same name to the Hudson River.
  • Baltimore and Ohio Railroad: One of the oldest rail lines in the United States and the first common carrier rail line.
  • National Road: The first major improved highway in the United States to be built by the federal government.

Advances in Transportation

In the late eighteenth century, the U.S. population was centered on the Atlantic coast, with all major population centers located on natural harbors or navigable waterways. Water and river transportation were central to the national economy, while most overland transportation was by horse, which made it difficult to move large quantities of goods. By 1803, the country was growing rapidly with the admission of Kentucky, Tennessee, and Ohio; however, the only means of transportation between these landlocked western states and their coastal neighbors was by foot, pack animal, or ship.

During the nineteenth century, transportation routes and means of transport underwent dramatic changes, greatly increasing national mobility. New and improved transportation technology made it easier and faster to transport goods: first national roads, then canals, and finally the railroad revolution.


In eighteenth-century America, roads were privately built, and the government played little role in their construction. Early toll roads were constructed and owned by joint-stock companies that sold stock to raise construction capital. As the nation expanded, however, the government came to see the transportation network as a public good worthy of government support.

In 1808, a government-sponsored Report on the Subject of Public Roads and Canals suggested that the federal government should fund the construction of interstate turnpikes and canals. The suggestion was controversial: Anti-Federalists opposed expanding government power, but many others were persuaded by the compelling need for overland roads for military operations as well as for general commerce. Following the report, work began on a National Road to connect the west to the eastern seaboard. In 1815, construction on the National Road (also known as the "Cumberland Road") began in Cumberland, Maryland; by 1818, the road had reached Wheeling, West Virginia (then part of Virginia). Though political strife ultimately prevented its western advance to the Mississippi River, this road became the gateway for thousands of westward-bound antebellum settlers.


In the late eighteenth and early nineteenth centuries, economic expansion spurred the building of canals to speed goods to market. Among the most important of these canals was the Erie Canal. First proposed in 1807, the Erie Canal waterway was constructed from 1817 to 1825 and was the first transportation system between New York City and the western interior of the United States. Extending from Albany, New York, on the Hudson River to Buffalo, New York, the canal cut transport costs by about 95 percent.

The Erie Canal made an immense contribution to the wealth and importance of New York City, which became the chief U.S. port, and it fostered a population surge in western New York State. It also served to increase trade throughout the nation by opening eastern and overseas markets to midwestern farm products, and it opened regions farther west to settlement. The success of the Erie Canal led to a proliferation of smaller canal routes in the region.


Profile of the grand Erie Canal: This is an 1832 profile of the Erie Canal, connecting New York City to the Western Interior of the U.S.

The Illinois and Michigan Canal was built in 1848 to connect the Great Lakes to the Mississippi River and the Gulf of Mexico. It helped establish Chicago as the transportation hub of the United States. Most of the canal work was done by Irish immigrants who had previously worked on the Erie Canal. Towns were planned out along the path of the canal, spaced at intervals corresponding to the length that the mules could haul the barges. From 1848 to 1852, the canal was a popular passenger route, but this ended in 1853 with the opening of the Chicago, Rock Island, and Pacific Railroad that ran parallel to the canal. Today, much of the canal is a long, thin park with canoeing and a 62.5-mile hiking and biking trail (constructed on the alignment of the mule tow paths).


Locktender's House on the Illinois and Michigan Canal: Lock No. 8 and Locktender's House, Illinois and Michigan Canal just west of Aux Sable Creek, near Morris, Illinois. The Illinois and Michigan Canal was an important canal in the nineteenth century, but was rendered obsolete when new railroads replaced it.


Canals radically improved transportation, but their reign was short-lived. By the mid-nineteenth century, the canal boom was brought to a sudden end by the rapid expansion of railroads. Railroads provided a quick, scheduled, and year-round mode of transportation. Railroads were superior to water routes in that they provided a safer, less hazardous mode of transport.

Beginning in 1826, several states chartered railroads, including Massachusetts, New York, South Carolina, and Pennsylvania. The most prominent early railroad was the Baltimore and Ohio Railroad (B&O), which linked the port of Baltimore to the Ohio River and offered passenger and freight service as of 1830.


Celebration of completion of the Transcontinental Railroad on May 10, 1869: Railroads came to play a major role in westward expansion in the late nineteenth century.

Effect on American Indians

Improved transportation increased the United States' potential to expand its borders westward. While much of the basis for westward expansion was economic, there was also another reason, which was bound up in the American belief that the country, and the American Indian “heathens” who populated it, were destined to come under the civilizing rule of Euro-American settlers and their superior technology, most notably railroads and the telegraph. While it's unclear whether that belief was a heartfelt motivation held by most Americans or simply a rationalization of the conquests that followed, the clashes—both physical and cultural—that resulted from this western migration left scars on the country that still are felt today.

The concept of "Manifest Destiny" found its roots in the long-standing traditions of territorial expansion upon which the nation itself was founded. Land developers, railroad magnates, and other investors capitalized on westward settlement into American Indian land. The Pacific Railway Act of 1862 was pivotal in helping settlers move west more quickly. Other railway initiatives would follow, subsequently creating a network linking all corners of the nation.

Factories, Working Women, and Wage Labor

Industrialization in the United States was marked by a growth in factories and an implementation of wage labor, as well as by an increase in the number of working women and deskilled workers.

Learning Objectives

Describe the early years of industrialization in the American Northeast

Key Takeaways

Key Points

  • Beginning with the textile industry, wage labor began to replace family labor and apprenticeship as the dominant form of labor in the United States.
  • Francis Cabot Lowell's Boston Manufacturing Company popularized reliance on wage labor, which involves a laborer selling his or her labor to an employer under contract. The Boston Manufacturing Company became the leading textile manufacturer in the United States and pioneered the Waltham-Lowell System.
  • Young women were the primary labor force in the textile industry, though children often were employed in mills, too.
  • In the 1830s, the Lowell Mill Girls organized strikes to protest wage reductions; these women were some of the earliest examples of labor- reform movements.

Key Terms

  • Deskilling: The process by which skilled labor within an industry or economy is eliminated by the introduction of technologies operated by semiskilled or unskilled workers.
  • wage labor: The socioeconomic relationship between a worker and an employer, in which the worker sells his or her labor under a formal or informal employment contract.
  • Waltham-Lowell System: A labor and production model employed in the United States, particularly in New England, during the early years of the American textile industry in the early nineteenth century.

Industrialization in the Northeast

As the nation deepened its technological base, artisans and craftsmen were made obsolete through the process of deskilling, as they were replaced by non-specialized workers. These workers used machines to replicate in minutes or hours work that would require a skilled worker days to complete. As New England 's textile industry took off, mill villages quickly grew into large factory towns, attracting rural workers from the surrounding countryside. The many children employed in early factories were paid very low wages because they were seen to be supplementing family income.

The Rise of the Textile Industry

At the beginning of the Industrial Revolution, the textile industry was rife with potential for mechanization. Prior to this period, textile production was traditionally performed at home; however, at the beginning of the nineteenth century, the work was mechanized and increasingly done on an industrial scale.

Slater's Mill

In the late eighteenth century, the English textile industry had adopted technological innovations that greatly improved the efficiency and quality of textile manufacture: the spinning jenny, water frame, and spinning mule. However, these technologies were closely guarded by the British government. In 1789, Samuel Slater, an apprentice in one of the largest textile factories in England, defied British laws against the emigration of skilled laborers and smuggled his knowledge of textile machinery to the United States. In 1793, he established a cotton-spinning mill with a fully mechanized water-power system at the Slater Mill in Pawtucket, Rhode Island. Slater's Mill was established in the Blackstone Valley, which became one of the earliest industrialized regions in the United States. At its peak, more than 1,000 mills operated in this valley. Slater went on to build several more cotton and wool mills throughout New England.

Lowell's Factories

Slater's mills ran on a business model called the "Rhode Island System." In this model, mill villages employed all members of a family. By the 1820s, this system began to be replaced by a more efficient system based upon the ideas of Francis Cabot Lowell, an American businessman who was instrumental in bringing the Industrial Revolution to the United States. Lowell's Boston Manufacturing Company dominated the textile industry in the United States in the 1820s, developing efficient and novel systems of labor and production.

Lowell, a Massachusetts merchant, was permitted to tour British textile factories in 1810. He memorized the design of textile machines, and on his return to the United States, he established the Boston Manufacturing Company. In the "Waltham-Lowell System," for the first time, both spinning and weaving occurred on site, and mill workers resided in collective company housing under strict supervision. Following his death in 1817, Lowell's associates built America's first planned factory town: the eponymous Lowell, Massachusetts.


"Lowell Mill Girls," ca. 1870: Two women factory workers known as "Lowell Mill Girls."

Wage Labor and Factory Conditions

Lowell popularized the use of the wage labor, a system in which a worker sells his or her labor to an employer under contract. Wage labor displaced reliance on apprenticeship and family labor. Jeffersonian agrarians viewed wage labor as a negative force in society, arguing that the economy of the United States should be built upon agriculture rather than on industry. Jefferson reasoned that the growth of a class of wage laborers would decrease self-sufficiency in America.

Lowell's factory employed young female workers, some as young as ten years old. These workers were typically hired for contracts of one year. Though considered an improvement on the squalid conditions of factory towns in the United Kingdom, conditions in the Lowell mills were severe by modern American standards. Factories were crowded and extremely loud with poor air quality and little to no ventilation. Employees worked from 5:00 a.m. until 7:00 p.m., for as many as 80 hours per week. This model became known as the "Waltham-Lowell System."

The monotony of repetitive tasks made days particularly long. In the winter, when the sun set early, oil lamps were used to light the factory floor, and employees strained their eyes to see their work and coughed as the rooms filled with smoke from the lamps. Some factories did not allow employees to sit down. Doors and windows were kept closed, especially in textile factories where fibers could be easily disturbed by incoming breezes, and mills were often unbearably hot and humid in the summer. In the winter, workers often shivered in the cold. In such environments, workers’ health suffered.

The workplace posed other dangers as well. The presence of cotton bales alongside the oil used to lubricate machines made fire a common problem in textile factories. Workplace injuries were also common. Workers’ hands and fingers were maimed or severed when they were caught in machines; in some cases, limbs or entire bodies were crushed. Workers who didn’t die from such injuries almost certainly lost their jobs, and with them, their income. Corporal punishment of both children and adults was common in factories; where abuse was most extreme, children sometimes died as a result of injuries suffered at the hands of an overseer.

As the decades passed, working conditions deteriorated in many mills. Workers were assigned more machines to tend, and the owners increased the speed at which the machines operated. Wages were cut in many factories, and employees who had once labored for an hourly wage now found themselves reduced to piecework, paid for the amount they produced and not for the hours they toiled. Owners also reduced compensation for piecework. Low wages combined with regular periods of unemployment made the lives of workers difficult, especially for those individuals with families to support. In New York City in 1850, for example, the average male worker earned $300 a year; it cost approximately $600 a year to support a family of five.

Early Labor Reform Movements

The long hours, strict discipline, and low wages soon led workers to organize to protest their working conditions and pay. In 1821, the young women employed by the Boston Manufacturing Company in Waltham went on strike for two days when their wages were cut. In 1824, workers in Pawtucket went on strike to protest reduced pay rates and longer hours, the latter of which had been achieved by cutting back the amount of time allowed for meals. Similar strikes occurred at Lowell and in other mill towns such as Dover, New Hampshire, where the women employed by the Cocheco Manufacturing Company ceased working in December 1828 after their wages were reduced.

In the 1830s, female mill operatives in Lowell formed the Lowell Factory Girls Association to organize strike activities in the face of wage cuts and, later, established the Lowell Female Labor Reform Association to protest the twelve-hour workday. They distributed legislative petitions, formed labor organizations, contributed essays and articles to pro-labor newspapers, and protested through turn-outs or strikes. Even though strikes were rarely successful and workers usually were forced to accept reduced wages and increased hours, work stoppages as a form of labor protest represented the beginnings of the labor movement in the United States.


Constitution of the Factory Girls Association in Lowell, Massachusetts, 1836: This is the constitution of the Labor Reform Association of Lowell's female textile workers, drafted in 1836.

The Growth of the Cotton Industry

Eli Whitney's invention of the cotton gin in 1793 resulted in massive growth in the cotton industry in the American South.

Learning Objectives

Describe the economic and political effects of Eli Whitney's cotton gin

Key Takeaways

Key Points

  • With the invention of Eli Whitney 's cotton gin in 1793, cotton became a tremendously profitable industry, creating many fortunes for white plantation owners in the antebellum South.
  • The cotton gin (short for "cotton engine") was a machine that quickly and easily separated cotton fibers from their seeds, a job that otherwise had to be performed painstakingly by hand, most often by slaves.
  • Cotton soon became the primary export in the United States and by 1860, on the eve of the Civil War, the southern states were providing two-thirds of the world's supply of cotton.
  • The textile boom in New England created an important domestic market for cotton producers. Cotton plantations depended on slave labor, and as a result of the boom in this industry, slavery increased dramatically in the early nineteenth century.
  • Due to its profound effect on American slavery, the growth of the cotton industry is frequently cited as one of the causes of the American Civil War.

Key Terms

  • Eli Whitney: An American inventor best known for inventing the cotton gin.
  • cotton gin: A machine that quickly and easily separates cotton fibers from their seeds, a job that otherwise must be performed painstakingly by hand.

Cotton in the South

In the antebellum era—that is, in the years before the Civil War—American planters in the South continued to grow Chesapeake tobacco and Carolina rice as they had in the colonial era. Cotton, however, emerged as the antebellum South’s major commercial crop, eclipsing tobacco, rice, and sugar in economic importance.

The Cotton Gin

In 1793, Eli Whitney revolutionized the production of cotton when he invented the cotton gin, a device that separated the seeds from raw cotton. Suddenly, a process that was extraordinarily labor-intensive when done by hand could be completed quickly and easily. The cotton gin (short for "cotton engine") quickly and easily separated cotton fibers from their seeds, a job that otherwise had to be performed painstakingly by hand—most often by slaves. Whitney's introduction of "teeth" in his cotton gin to comb out the cotton and separate the seeds revolutionized this process.

With the invention of Whitney's cotton gin, cotton became a tremendously profitable industry, creating many fortunes in the antebellum South. American plantation owners, who were searching for a successful staple crop to compete on the world market, found it in cotton.


A cotton gin on display at the Eli Whitney Museum: The invention of the cotton gin revolutionized the textile industry in the early nineteenth century and transformed the economy of the South.

Domestic and International Markets

As a commodity, cotton had the advantage of being easily stored and transported. A demand for it already existed in the industrial textile mills in Great Britain, and in time, a steady stream of slave-grown American cotton would also supply northern textile mills. Southern cotton, picked and processed by American slaves, helped fuel the nineteenth-century Industrial Revolution in both the United States and Great Britain.

New Orleans, Louisiana, and Galveston, Texas, were shipping points that derived substantial economic benefit from cotton raised throughout the South. Cotton soon became the primary export in the United States, and by 1860, on the eve of the Civil War, the southern states were providing two-thirds of the world's supply of cotton.

Additionally, the development of large-scale mills and metal machine tools dramatically increased textile production in northern mill towns in the early 1800s. Though cotton was primarily grown for export to Europe, this textile boom in New England created an important domestic market for southern cotton producers.

Cotton, Slavery, and the Civil War

Due to its profound effect on American slavery, the growth of the cotton industry is frequently cited as one of the causes of the American Civil War. The number of slaves rose in concert with the increase in cotton production, increasing from approximately 700,000 in 1790 to roughly 3.2 million in 1850. A congressional ban on the importation of slaves from Africa in 1808 only increased the demand for domestic slaves on cotton plantations, hindering the work of abolitionists who sought to end slavery. The domestic slave trade exploded, providing economic opportunities for whites involved in many aspects of the trade and increasing the possibility of slaves’ dislocation and separation from kin and friends.


Slave market in Atlanta, Georgia, 1864: This image depicts the site of a slave market in Atlanta in 1864. The cotton industry in the South was fully dependent on the institution of slavery.

A Communications Revolution

The United States experienced a communication revolution in in the early 1800s, during which the penny press and the electrical telegraph emerged.

Learning Objectives

Identify two central components in the nineteenth century's communications revolution

Key Takeaways

Key Points

  • Prior to the development of the penny press, newspapers primarily serviced the business community and served as tools for political propaganda.
  • In 1833, the first penny paper, the Sun, was founded in New York. Penny papers were the first papers to target working and middle class audiences.
  • While most newspapers were controlled by political parties and reported a party line, penny papers, known for their sensational journalism, were politically independent. In 1836, Samuel Morse and Alfred Vail invented the electrical telegraph and the Morse code signaling alphabet, allowing for the wired communication of messages using electrical signals.
  • Improved communication systems fostered the development of business, economics, and politics by allowing for dissemination of news at a speed previously unknown.

Key Terms

  • Electrical Telegraph: A type of communication that uses electrical signals, usually conveyed via telecommunication lines or radio.

Advances in forms of communications greatly expanded in the United States during the early 1800s. The penny press and the electrical telegraph were among the innovations that emerged during this communications revolution.


In the early 1800s, newspapers were largely meant for the elite. They generally took two forms: mercantile sheets intended for the business community, which contained ship schedules, wholesale product prices, advertisements, and some foreign news; and political newspapers, which were controlled by political parties or their editors as a means of sharing their views with elite stakeholders. Journalists reported the party line and editorialized in favor of party positions.

Mass production of inexpensive newspapers became possible due to the shift from handcrafted printing to steam-powered printing. In 1833, the first "penny paper," the Sun, was founded in New York. Penny papers—specifically targeting the working class urban population—quickly became widespread. The cheap sensationalized news sources covered crime, tragedy, adventure, and gossip, and these newspapers easily shifted allegiance on political issues. The changes made during the Penny Press era set the standards for all future newspapers, and those standards are still implemented today.


The New York Herald Penny Press, 1861: The penny press revolutionized journalism in the 1830s.

Electrical Telegraph

In 1836, Samuel Morse and Alfred Vail developed an electrical telegraph capable of transmitting text messages over long distances using wire. Together, they developed the Morse code signaling alphabet system.

In 1843, the U.S. Congress appropriated $30,000 to fund an experimental telegraph line from Washington, D.C., to Baltimore, Maryland. In May of 1844, Morse made the first public demonstration of his telegraph, sending the famous message, "What hath God wrought?" The Morse-Vail telegraph was quickly deployed in the following two decades. Improved communication systems fostered the development of business, economics, and politics by allowing for dissemination of news at a speed previously unknown.

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