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Midwestern Industrialization and the American Manufacturing Belt in the Nineteenth Century

Published online by Cambridge University Press:  03 March 2009

David R. Meyer
David R. Meyer
Affiliation:
Assistant Professor of Sociology, Brown University, Providence, RI 02912.
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Abstract

The Midwest made the transition from primary to secondary activity before 1880 by developing a large diversified industrial sector to serve burgeoning midwestern demand for manufactures. Because the Midwest had industrialized, its firms were able to compete with eastern producers in multiregional and national markets after 1880, when the transportation and communication systems were fully integrated. Supporting evidence is drawn from a national set of 327 urban-industrial counties, with a focus on the Midwest.

Type
Articles
Information
The Journal of Economic History , Volume 49 , Issue 4 , December 1989 , pp. 921 - 937
Copyright
Copyright © The Economic History Association 1989

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References

1 In this article the term section refers to large multistate areas while region refers to a metropolis and its hinterland; sections thus contain more than one region. New England is an exception; much of it consists of Boston and its hinterland, although the southwestern part is within New York City's hinterland. Delimitations of the manufacturing belt identify its westward margin approximately as a line extending from central Minnesota to central Missouri and its southern margin as a line from southern Missouri to southern Delaware. See DeGeer, Sten, “The American Manufacturing Belt,” Geografiska Annaler, 9 (1927), pp. 233–359;CrossRefGoogle ScholarMeyer, David R., “Emergence of the American Manufacturing Belt: An Interetation,” Journal of Historical Geography, 9 (04. 1983), pp. 145–74;CrossRefGoogle Scholar and Pred, Allan R., The Spatial Dynamics of U.S. Urban-Industrial Growth,1800–1914 (Cambridge, MA, 1966).Google Scholar

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3 North, Douglass C., The Economic Growth of the United States, 1790–1860 (Englewood Cliffs, NJ, 1961), pp. 135–55.Google ScholarFor a staple theory of midwestern industrialization based on labor supply, see Earle, Carville and Hoffman, Ronald, “The Foundation of the Modern Economy: Agriculture and the Costs of labor in the United States and England, 1800–60,” American Historical Review, 85 (12 1980), pp. 1055–94.CrossRefGoogle ScholarNeither Roger Ransom nor Albert Niemi challenged the conventional explanation of midwestern industrialization in their debate about antebellum regional growth. Ransom argued that transportation improvements permitted the Midwest to specialize in agriculture and associated processing manufacturing, while Niemi stressed that transportation improvements stimulated the rise of industries which served local markets. Ransom, Roger L., “Interregional Canals and Economic Specialization in the Antebellum United States,” Explorations in Entrepreneurial History, 5 (Fall 1967–1968), pp. 12–35;Google ScholarRansom, Roger L., “A Closer Look at Canals and Western Manufacturing,” Explorations in Economic History, 8 (Summer 1971), pp. 501–8;CrossRefGoogle ScholarRansom, Roger L., “A Rebuttal,” Explorations in Economic History, 9 (Summer 1972), pp. 425–26;CrossRefGoogle ScholarNiemi, Albert W. Jr, “A Further Look at Interregional Canals and Economic Specialization: 1820–1840,” Explorations in Economic History, 7 (Summer 1970), pp. 499–520;CrossRefGoogle Scholarand Niemi, Albert W. Jr, “A Closer Look at Canals and Western Manufacturing in the Canal Era: A Reply,” Explorations in Economic History, 9 (Summer 1972), pp. 423–24.CrossRefGoogle Scholar

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5 The masterful synthesis is contained in Perloff, Harvey S. et al. , Regions, Resources, and Economic Growth (Baltimore, 1960).Google Scholar

6 This focus on the midwestern iron and steel industry in the late nineteenth century maintained the prominence given it by historians. See Hunter, Louis C., “The Heavy Industries,” in Williamson, Harold F., ed., The Growth of the American Economy (2nd edn., New York, 1951), Pp. 474–94;Google ScholarKirkland, Edward C., Industry Comes of Age: Business, Labor, and Public Policy, 1860–1897, Economic History of the United States, vol. 6 (New York, 1961);Google ScholarDavis, Lance E., Easterlin, Richard A., and Parker, William N., American Economic Growth (New York, 1972);Google Scholarand Temin, Peter, Iron and Steel in Nineteenth-Century America (Cambridge, MA, 1964).Google Scholar

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10 Detailed industrial data are available for only a few urban places prior to 1880. The U.S. Censuses of Manufactures for 1860, 1870, and 880 have this data for counties containing the urban places, and summary manufacturing totals for these counties are available for 1900 and 1920 to provide selected long-term comparisons. See Table I for sources.Google Scholar

11 Two criteria for inclusion were a city within the county had to reach a population size of 25,000 or more by 1900; and a county (not in the first set) had to have 1,000 or more manufacturing employees by 1880. The latter criterion assured the inclusion of small urban-industrial places.Google Scholar

12 The sections were adjusted to make them compatible with the outline of the manufacturing belt used in previous studies of regional industrial growth. For example, see Niemi, State and Regional Patterns; and Perloff, et al., Regions, Resources, and Economic Growth.Google Scholar

13 This decade also showed the peak increase in urbanization. Williamson, Jeffrey G., “Antebellum Urbanization in the American Northeast,” this JOURNAL, 25 (12 1965), table I, p. 600. National manufacturing employment growth did not correspond directly to growth of value added. The growth of the latter during the 1860s was significantly below the 1870s, whereas employment growth showed the reverse.Google ScholarSee Gallman, Robert E., “Commodity Output, 1839–1899,” in Trends in the American Economy in the Nineteenth Century, Studies in Income and Wealth, vol. 24 (Princeton, 1960), table 3, p. 24;Google Scholaralso see Engerman, Stanley L, “The Economic Impact of the Civil War,” Explorations in Entrepreneurial History, 2nd series, 3 (Spring/Summer 1966), pp. 176–99.Google Scholar

14 For an elaboration of these, see Meyer, “Emergence of the American Manufacturing Belt.”Google Scholar

15 It is not feasible to examine the demand for each product and identify its precise timing. For a synthesis of some of the findings in specific industries, see Meyer, “Emergence of the American Manufacturing Belt.”Google Scholar

16 These interrelationships are developed more fully in Meyer, David Ralph, “A Dynamic Model of the Integration of Frontier Urban Places into the United States System of Cities,” Economic Geography, 56 (04 1980), pp. 120–40;CrossRefGoogle Scholarand Conzen, Michael Peter, “Metropolitan Dominance in the American Midwest During the Later Nineteenth Century” (Ph.D. diss., University of Wisconsin at Madison, 1972), fig. 2.4, pp. 47–54.Google Scholar

17 The population in the Midwest, similar to the East, was not evenly dispersed. Densities were much higher along the Ohio-Mississippi river system, the Great Lakes, and other major rivers, canals, and railroads. Clark, John G., The Grain Trade in the Old Northwest (Urbana, 1966);Google ScholarFishlow, Albert, American Railroads and the Transformation of the Ante-Bellum Economy (Cambridge, MA, 1965);Google ScholarHunter, Louis C., Steamboats on the Western Rivers (Cambridge, MA, 1949);Google Scholarand Scheiber, Harry N., Ohio Canal Era: A Case Study of Government and the Economy, 1820–1861 (Athens, OH, 1969).Google Scholar

18 Hunter, Steamboats on the Western Rivers;Google Scholarand Haites, Erik F., Mak, James, and Walton, Gary M., Western River Transportation: The Era of Early Internal Development, 1810–1860 (Baltimore, 1975).Google Scholar

19 At rates of one to two cents per ton-mile, the canals offered sharply reduced transportation rates for commodities relative to the best antebellum wagon rates of 15 cents per ton-mile. See Haites, Mak, and Walton, Western River Transportation, appendix A, tablses A-2 and A-3, pp. 125–28;Google Scholarand North, Douglass C., Growth and Welfare in the American past (Englewood Cliffs, NJ, 1966), chart 19, p. 111. The intersectional canals did not carry significant amounts of agricultural exports until after 1835, and most of that was carried by the Erie.Google Scholar

20 Scheiber, Ohio Canal Era, table 5.2, p.134.Google Scholar

21 Assuming that a fully loaded wagon averaged two miles per hour, farmers up to 10 miles away on either side of the canal could make a one-day round trip to a canal in a day, therefore as much as 18,340 square miles (917 miles times 20-mile band) was accessible to the canals. Taylor, The Transportation Revolution, p. 138. This is a slight exaggeration because canals were not straight and they intersected, but it suggests the magnitude of their impact on the economic development of Ohio.Google Scholar

22 Ibid., pp. 47–48.

23 Fishlow, American Railroads, pp. 163–236.Google Scholar

24 Ibid., table 16, p. 172; and Fishlow, Albert, “Productivity and Technological Change in the Railroad Sector, 1840–1910,” in Output, Employment, and Productivity in the United States After 1800, Studies in Income and Wealth, vol. 30 (New York, 1966), table 1, p. 585.Google Scholar

25 Berry, Thomas Senior, Western Prices Before 1861: A Study of the Cincinnati Market (Cambridge, MA, 1943), pp. 520–29;Google ScholarDavis, Easterlin, and Parker, American Economic Growth, table 13.12, p. 501;Google Scholarand U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970, Bicentennial Edition, part I (Washington, DC, 1975), series Q321–328.Google Scholar

26 Taylor, George Rogers and Neu, Irene D., The American Railroad Network, 1861–1890 (Cambridge, MA, 1956). “Fast-freight” lines, started as independent companies during the 1850s, operated over many lines to offer long-distance shipment without breaking bulk, but only a few existed before the Civil War and they were not efficient carriers until after the war. For the five-year period preceding 1860, through freight between the East and Midwest on the three major railroads—the New York Central, the Pennsylvania, and the Baltimore and Ohio—averaged only 19 percent of their eastbound traffic and only 8 percent of their westbound traffic.CrossRefGoogle ScholarIbid., pp. 34, 67–76. The through-freight percentages are computed as an average of the three lines. Integration of the East with the Midwest increased from the late 1860s through the 1870s as fast-freight lines proliferated and expanded, gauges were standardized, lines were connected, and the through waybill for monitoring freight was perfected.

27 Haites, Mak, and Walton, Western River Transportation, appendix A, tables A-I to A-3, pp. 124–28. The exports are computed as five-year averages centered on the 1840 date and three years, 1858 to 1860, for the 1860 date. Exports to New Orleans cannot be disaggregated into those originating in the Midwest or in the South. The exports to New Orleans declined as a percentage of total exports from 71 percent in 1840 to 45 percent in 1860. The per capita measure is computed using the total population in the Midwest; see Table 2. Although this is a crude measure, it indicates the broad dimensions of change.Google Scholar

28 For example, see Pred, Allan R., Urban Growth and City-Systems in the United States,1840–1860 (Cambridge, MA, 1980), pp. 101–9.Google Scholar

29 During the 1840s and early 1850s St. Louis arivals from New Orleans never exceeded 17 percent of total arrivals and usually they were closer to 10 percent.Google ScholarHunter, Steamboats on the Western Rivers, table 2, p. 49, and appendix, table 2, pp. 644–45.Google Scholar

30 This location pattern has solid support in both theory and empirical work. Aduddell, Robert and Cain, Louis, “Location and Collusion in the Meat Packing Industry,” in Cain, Louis P. and Uselding, Paul J., eds, Business Enterprise and Economic Change: Essays in Honor of Harold F. Williamson (Kent, OH, 1973), pp. 85–117;Google ScholarHoover, The Location of Economic Activity;Google ScholarIsard, Walter, Location and Space-Economy (Cambridge, MA, 1956);Google ScholarWalsh, Margaret, “Pork Packing as a Leading Edge of Midwestern Industry, 1835–1875,” Agricultural History, 51 (10 1977), pp. 702–17;Google Scholarand Weber, Alfred, Theory of the Location of Industries, trans. by Friedrich, Carl J. (Chicago, 1929).Google Scholar

31 Pittsburgh, an early transshipment point for eastern imports to the Ohio Valley, remained important throughout the antebellum years, while Cincinnati was a major transshipment point during the pre-1850 steamboat period for eastern manufactures brought upriver from New Orleans, and Cleveland was an important transshipment point for imports over the Erie Canal before 1840. Berry, Western Prices, pp. 71–87; Fishlow, American Railroads, pp. 263–69; North, The Economic Growth of the United States, pp. 101–21;Google ScholarReiser, Catherine Elizabeth, Pittsburgh's Commercial Development, 1800–1850 (Harrisburg, 1951);Google ScholarScheiber, Ohio Canal Era;Google Scholarand Taylor, The Transportation Revolution, pp. 156–69.Google Scholar

32 Berry, Western Prices, pp. 252–56;Google ScholarFishlow, American Railroads, pp. 263–69; North, The Economic Growth of the United States, pp. 153–55; Scheiber, Ohio Canal Era, pp. 187–211;Google Scholarand Walsh, Margaret, The Manufacturing Frontier (Madison, 1972).Google Scholar

33 The sharp rise in machinery in Midwest cities between 1870 and 1880 is partly an artifact of the industrial classification. In 1880 the machinery category is dominated by agricultural equipment. In that census, remaining machinery production was combined with foundry products which are primary metals manufactures. This combined category was classified as primary metals in this study.Google Scholar

34 The percentages for these eight at each date were 1860(51.4 percent), 1870(48.0 percent), and 1880 (51.7 percent). These were computed from Tables 1 and 4. Except for Indianapolis, the eight cities in 1880 also were the largest in 1860 and 1870; Columbus was in the top eight in 1860, but Indianapolis replaced it in 1870.Google Scholar

35 Meyer, “A Dynamic Model of the Integration of Frontier Urban Places”Google ScholarPred, Urban Growth and City-Systems;Google Scholarand Vance, James E. Jr, The Merchant's World: The Geography of Wholesaling (Englewood Cliffs, NJ, 1970).Google ScholarSee maps in Paxson, Frederic L., “The Railroads of the ‘Old Northwest’ Before the Civil War,” Transactions of the Wisconsin Academy of Sciences, Arts, and Letters, 17, part 1 (1914), pp. 243–74.Google Scholar

36 For evidence on the enormous growth of Chicago's industrial shipments during the late 1860s, see Cain, Louis P., “From Mud to Metropolis: Chicago Before the Fire,” Research in Economic History, 10 (1986), table 7, p. 120.Google Scholar

37 See maps in Paxson, “The Railroads of the ‘Old Northwest.’”Google Scholar

38 The study of urban manufacturing rather than total (urban and rural) manufacturing shifts the focus to the locations that housed most industry in the late nineteenth century, rather than giving greater weight to the rural and village craft manufactures that were being driven from business by city factories and to the dispersed processing industries in the rural areas. In this study the rural and craft manufacturing and rural processing industries are included because they surround the urban centers within counties, but they have been reduced in importance by the selection process described earlier. A comparison with Niemi's findings on processing employment, which is based on the entire area (rather than only urban), reveals the effect of focusing on urban employment. According to Niemi's data, processing employment in 1860 comprised 36.3 percent of total employment, while the present study of urban manufacturing identified the percentage as 30.4 percent. Niemi, State and Regional Patterns, appendix 6, p. 125.Google Scholar

39 The 1880 census official, Charles H. Fitch, noted the existence of the Wilson Sewing Machine Company in Chicago and the Elgin National Watch Company in Elgin, an industrial satellite of Chicago. U.S. Census Office, “Report on the Manufactures of Interchangeable Mechanism,” Tenth Census, 1880, pp. 35, 67.Google Scholar

40 Total factor productivity (output measured by value added) grew at annual rates of 2.1 percent from 1820 to 1850 and 2.4 percent from 1850 to 1860, while labor productivity grew at annual rates of 2.3 percent from 1820 to 1850 and 3.2 percent from 1850 to 1860. Kenneth L.Sokoloff, “Productivity Growth in Manufacturing During Early Industrialization: Evidence from the American Northeast, 1820–1860,” in Engerman, Stanley L. and Galiman, Robert E., eds., Long-Term Factors in American Economic Growth (Chicago, 1986), tables 13.6, 13.8, 13.11, and 13.13, pp. 698, 710–11, 719, 723;CrossRefGoogle Scholar also see Lazonick, William and Brush, Thomas, “The ‘Horndal Effect’ in Early U.S. Manufacturing,” Explorations in Economic History, 22 (01 1985), pp. 53–96.CrossRefGoogle Scholar

41 Sokoloff, Kenneth L., “Was the Transition from the Artisanal Shop to the Nonmechanized Factory Associated with Gains in Efficiency? Evidence from the U.S. Manufacturing Censuses of 1820 and 1850,” Explorations in Economic History, 21 (10 1984), pp. 351–82.CrossRefGoogle Scholar

42 Cain, Louis P. and Paterson, Donald G., “Biased Technical Change, Scale, and Factor Substitution in American Industry, 1850–1919,” this JOURNAL, 46 (03 1986), pp. 153–64;Google Scholar and James, John A., “Structural Change in American Manufacturing, 1850–1890,” this JOURNAL, 43 (06 1983), pp. 433–59;Google ScholarMack, Jeremy, “Industrial Structure and the Emergence of the Modern Industrial Corporation,” Explorations in Economic History, 22 (01 1985), pp. 29–52;Google Scholar and Atack, Jeremy, “Economies of Scale and Efficiency Gains in the Rise of the Factory in America,1820–1900,” in Kilby, ed., Quantiry & Quiddity, pp. 286–335.Google Scholar

43 See Atack, “Industrial Structure,” table 1, pp. 34–35.Google Scholar

44 Porter, Glenn and Livesay, Harold C., Merchants and Manufacturers: Studies in the Changing Structure of Nineteenth-Century Marketing (Baltimore, 1971), pp. 2, 34–36.Google Scholar

45 Hounshell, David A., From the American System to Mass Production, 1800–1932 (Baltimore, 1984), pp. 124–51. Sewing machine cases sold in conjunction with sewing machines were an exception, and expensive hand-crafted furniture was transported long distances. Philadelphia, for example, supplied such furniture to the South;Google Scholarsee Freedley, Edwin T., Philadelphia and Its Manufactures (Philadelphia, 1867), p. 294. The wealthy, however, were a small market, thus most furniture firms sold to the large middle income market within their region.Google Scholar

46 Chandler, Alfred D. Jr, The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA, 1977);Google Scholar and Porter and Livesay, Merchants and Manufacturers.Google Scholar

47 Porter and Livesay, Merchants and Manufacturers, pp. 180–91.Google Scholar

48 Broehl, Wayne G. Jr, John Deere's Company (New York, 1984);Google ScholarHutchinson, William T., Cyrus Hall McCormick: Seed-Time, 1809–1856 (New York, 1930);Google ScholarHutchinson, William T., Cyrus Hall McCormick: Harvest, 1856–1884 (New York, 1935);Google Scholarand Hounshell, From the American System to Mass Production, pp. 152–87.Google Scholar

49 Factories only needed to get their products to the main long-distance network. This could be done by either locating along these lines or shipping goods to the nearest metropolis. As a percentage of long-distance transportation cost, the cost of access to the long-distance network was small because, at most, only one terminal transshipment cost was added plus the short distance to the metropolis.

50 Elsewhere I have offered an explanation for southern industrial retardation. See Meyer, David R., “The Industrial Retardation of Southern Cities, 1860–1880,” Explorations in Economic History, 25 (10 1988), pp. 366–86. That argument stresses the effects of slave versus free labor and the effects of the Civil War.CrossRefGoogle Scholar

See also Lebergott, Stanley, The Americans: An Economic Record (New York, 1984), pp. 243–48. Midwestern industry may have benefited indirectly from the Civil War as investment was diverted from civilian nonfarm industry to wartime industries and to farm development. Farmers in the Midwest benefited from wartime food demands as workers left agriculture and other sectors to serve in the war. Farm income must have surged as individual farms received higher prices for their output and new farms were established. Although prices for both food and manufactured goods doubled, farmers benefited on balance compared to urban dwellers, who had to purchase both higher priced food and manufactured goods. By producing some food, farmers reduced the impact of these higher prices and deferred expenditures on farm equipment until after the war, when prices would drop. Evidence from the sales records of the McCormick reaper factory in Chicago imply that this strategy was followed. During the war McCormick built an average of 4,969 machines annually, only 8 percent above the immediate prewar years (1858 to 1860). After the war production surged, and by 1869 to 1871 McCormick's production, relative to the prewar years, had more than doubled to 9,485 annually.Google Scholar This is computed from Hounshell, From the American System to Mass Production, table 4.1, p. 161.Google Scholar

51 The southern urban-industrial employment was 29,626 in 1860, 39,799 in 1870, and 67,737 in 1880. For the details of this comparison, see Meyer, “The Industrial Retardation,” pp. 366–86.Google Scholar