Background

The telegraph was a bit like the telephone or the internet of its age. Imagine that one day you communicate with someone in a city 300 miles away by sending a letter and waiting several weeks for a response or traveling a week or more on the road in order to visit them. Then the next day, you can communicate by sending a telegraph and receiving a response the following day. You can imagine a similar transformation with the railroads that replaced wagons, horses, and carts; or the steamboats on the Mississippi, Ohio, or Hudson Rivers, the Atlantic coast, or the Great Lakes and how they replaced canoes, barges, and sailing ships. Within a couple of decades, these kinds of trips went from a week or more to a matter of days. Even more dramatic, California and communities along the Pacific Coast in the 1840s could only get information from the east coast by waiting for the mail on ships that sailed around South America. Then in 1861, suddenly they were in direct contact with New York City in a matter of a day or two, and in 1869 they could spend a week or less on a train and get to Chicago, a journey that would have taken months in 1840.

Actually, it would be a couple of decades before Americans routinely used these modes of communication and transportation in their daily lives. Those who took early advantage of the new technologies were business people and businesses. The new technologies opened up markets, created enterprise opportunities, and inspired the development of new products and services in what we call the Market Revolution of the early 19th century. In this problem, you will examine the impact of these technologies on the larger economy and the single individual.

Sources

1. Railroads, 1830



2. Railroads, 1860



3. Waterways, 1825



4. Waterways, 1860



5. Telegraph, 1848



6. Telegraph, 1860



7. GDP bar graph of 1800, 1830, and 1860



8. The 8 Largest Cities in 1800



9. The 8 Largest Cities in 1830



10. The 8 Largest Cities in 1860

*(City and County)

Three Fictional Historical Actors

1. John and Emma Lewis were owners of a business making beef jerky in Chicago. They rented a small store space with a walk-up apartment above and a quarter acre parcel behind it near the southeast side of Chicago, not far from the stockyards. In 1830, the Lewises sold beef jerky wholesale to grocers in the Chicago area and employed themselves and occasionally a hired-in male employee when business picked up. To make the beef jerky, the Lewises needed beef, drying racks made of wood, salt, some spices, and saltpeter (which preserved the jerky.) They also needed wood crates for delivering the product. As a courtesy to their grocer customers, they provided large glass jars in which to display the jerky on countertops. Though they were not sure how much they made on their business because they failed to keep good records, the Lewises thought they sold about $50,000 (US Dollars 2010) of beef jerky per year and kept a 50percent profit.By 1860, Lewis Dried Beef Products was one of the 10 largest beef jerky producers in the United States. Not only did the Lewises sell beef jerky, they also sold a number of other salted products, such as corned beef and ham. They were also experimenting with canned beef products. They had moved the wholesale business further south outside Chicago to a factory of 100 acres a little further from the stockyards. They now employed 70 men and a business staff of five; they employed an attorney and an accounting firm in Chicago. Their grocery trade included 732 stores from St. Louis to Boston to New Orleans and Charleston and they were just beginning to sell mail order dried beef products in 1858. They sold $2,323,415 (US dollars 2010) of product per year and made a profit of 62 percent in 1860. On the advice of their attorney, the Lewises sent an agent to Washington, DC, to try to negotiate a contract to sell beef jerky to the United States Army. If successful, the Lewises intended to borrow about $500,000 (US dollars 2010) from a bank in New York that just opened an office in Chicago in order to build another factory in Chicago and purchase a canning and salting factory in Syracuse, New York, which their son, Lewis Jr., and their nephew, James, would run.
2. In 1830, Mary Livingston of Cincinnati, Ohio had a small and not very successful dressmaking business which she ran out of her home. Her trade was almost exclusively among women, and there were not that many elite and middle-class women in Cincinnati who would buy more than one dress a year. However, that same year Mary was able to obtain a piecing-out contract (to hem, sew on buttons, decorate with trim, or make other small parts of the clothing) with a successful tailor, Philip Robbins, who was popular in Cincinnati for making a good quality suit at a reasonable price. Robbins was able to keep the price down precisely because he pieced out most parts of the tailoring to local women seamstresses like Mary Livingston. Livingston was responsible for obtaining buttons, special threads, lining fabrics, interfaces, ties, ribbons, etc. which were part of her job costs. Because the special seamstress products came from a few suppliers in Philadelphia, her costs were high. There were months in which Mary’s costs exceeded her contract labor.By 1860, Mary had given up the women’s clothing business. Instead, she had turned the back of her home into a small factory for making men’s working clothes, a business which she and Philip Robbins had founded in 1840. Robbins had provided money (from his own sources and a loan from a Philadelphia bank) to build the extra rooms at the back of Mary’s home and buy the sewing equipment and first two years’ expenses of the factory. Mary hired and supervised the 20 seamstresses in the manufacture of all phases of the men’s working garments; a few were on piecing out contracts but most were working for wages. All of her employees were women because men preferred to work for themselves as tailors rather than work for wages or piecemeal. Robbins sold the men’s clothes to dry goods stores from Boston to Saint Louis to New Orleans and even made a few shipments a year to a store in San Francisco. By 1860, the materials Mary needed for the men’s clothes were easily obtained from suppliers not only in Philadelphia but also Boston, New York, and Baltimore, and they were becoming cheaper with each year as more fabric manufacturers sprung up in the United States. In 1858, Robbins negotiated a small contract for making US Army uniforms. The Robbins label of men’s clothing was making about $200,000 (US dollars 2010) a year and the partners made a 40 percent profit on sales; Robbins received 75 percent of the profit and Livingston the rest.
3. In 1840, James Kennedy lived in Pittsburgh, Pennsylvania and worked as a puddler in the local iron foundry. The puddler was the aristocracy of the ironworkers’ trade. Puddling required both strength and a lot of experience in the handling of the melted iron ore in the puddling furnace. Kennedy at 6’2″ and 220 pounds and with almost 15 years, half his life, working as a puddler fit the bill. However, the puddler’s life was a short one (average 40 years) due to puddlers’ proximity to the high temperatures of the furnace and the many work accidents. After James’s uncle died in such an accident, James decided that he should take up an opportunity presented to him by a childhood friend, John Jacobs, who had a small inheritance and wanted to start a wrought iron foundry. (Before the Civil War, railroad rails were made of wrought iron, not steel. It was only later in the 1870s that the new Bessemer furnace made steel production cheaper and steel replaced wrought iron.) Jacobs needed James’s knowledge of the furnace, his connections with other puddlers, and his understanding of the working of the foundry to make the business a success. So they set up J K Ironworks in Pittsburgh in 1840.Amazingly, J K Ironworks survived its first two years and began to thrive its third year when Jacobs was able to negotiate a rail contract with the Pennsylvania Company, the largest railroad company in America before the Civil War. By 1850, J K was making 10,000 tons of rail for the Pennsylvania Company for $60 (US dollars 2010) per ton. Its profit was almost 70 percent, Jacobs receiving 60 percent and James 40 percent. Before 1858, J K had a contract with the Pennsylvania Company to ship their iron rails very cheaply via the Pennsylvania’s railcars to the railheads where the construction was going on. However, that same year the Pennsylvania Company decided to double its charge for shipping the rails, cutting severely into J K’s profit. When Jacobs tried to negotiate with other railroads, he found that they had followed the Pennsylvania Company’s practice of charging high rates for shipping; it was a classic “squeeze of the supplier.” In 1859, James died and Jacobs decided to accept an offer from Tom Scott of the Pennsylvania Company to sell J K for $3,000,000 (US dollars 2010). Jacobs retired in Europe and James Kennedy’s sons moved to Nevada to try their hand at silver mining, where they were only moderately successful.

Analyze the Evidence

Questions

• What potential effect does growth in communication and transportation infrastructure seem to have on the economic lives of individuals?
• What relationship is there between growth in the communication and transportation infrastructure and overall growth in an economy (as measured by GDP, or gross domestic product)?

Watch the background videos and examine all the maps and the chart at home. Read the 3 fictional historical actors and discuss how the growth in the communications and transportation infrastructure of the early 19th century may have affected the economic behavior of each person.

Complete the Economic Profile Chart by listing 6 facts in these 3 individuals’ economic lives or the growth of their businesses that were linked, directly or indirectly, to a change in communication or transportation as shown on the maps. For example, you might note that John and Mary Lewis were able to go into the salted ham business because they could ship the perishable meat product quickly to the east coast due to the growth of the railway system.

Be prepared to discuss the comparison of these individual cases to the growth in GDP and the centers of urban population growth in the maps and chart.

Economic Profile Chart