|United States Economy
Cotton, at first a small-scale crop in the South, boomed following
Eli Whitney's invention in 1793 of the cotton gin, a machine that
separated raw cotton from seeds and other waste. Planters in the South
bought land from small farmers who frequently moved farther west. Soon,
large plantations, supported by slave labor, made some families very
It wasn't just southerners who were moving
west, however. Whole villages in the East sometimes uprooted and
established new settlements in the more fertile farmland of the Midwest.
While western settlers are often depicted as fiercely independent and
strongly opposed to any kind of government control or interference, they
actually received a lot of government help, directly and indirectly.
Government-created national roads and waterways, such as the Cumberland
Pike (1818) and the Erie Canal (1825), helped new settlers migrate west
and later helped move western farm produce to market.
Many Americans, both poor and rich,
idealized Andrew Jackson, who became president in 1829, because he had
started life in a log cabin in frontier territory. President Jackson
(1829-1837) opposed the successor to Hamilton's National Bank, which he
believed favored the entrenched interests of the East against the West.
When he was elected for a second term, Jackson opposed renewing the
bank's charter, and Congress supported him. Their actions shook
confidence in the nation's financial system, and business panics
occurred in both 1834 and 1837.
Periodic economic dislocations did not
curtail rapid U.S. economic growth during the 19th century. New
inventions and capital investment led to the creation of new industries
and economic growth. As transportation improved, new markets
continuously opened. The steamboat made river traffic faster and
cheaper, but development of railroads had an even greater effect,
opening up vast stretches of new territory for development. Like canals
and roads, railroads received large amounts of government assistance in
their early building years in the form of land grants. But unlike other
forms of transportation, railroads also attracted a good deal of
domestic and European private investment.
In these heady days, get-rich-quick
schemes abounded. Financial manipulators made fortunes overnight, but
many people lost their savings. Nevertheless, a combination of vision
and foreign investment, combined with the discovery of gold and a major
commitment of America's public and private wealth, enabled the nation to
develop a large-scale railroad system, establishing the base for the
Source: U.S. Department of State