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Midwestern Industrialization and the American Manufacturing Belt in the Nineteenth Century

  • David R. Meyer (a1)
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.

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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. 233359;Meyer, David R., “Emergence of the American Manufacturing Belt: An Interetation,” Journal of Historical Geography, 9 (04. 1983), pp. 145–74; and Pred, Allan R., The Spatial Dynamics of U.S. Urban-Industrial Growth,1800–1914 (Cambridge, MA, 1966).

2 Field, Alexander James, “Sectoral Shift in Antebellum Massachusetts: A Reconsideration,” Explorations in Economic History, 15 (04. 1978), pp. 146–71;Goldin, Claudia and Sokoloff, Kenneth, “Women, Children, and Industrialization in the Early Republic: Evidence from the Manufacturing Censuses,” this JOURNAL, 42 (12. 1982), pp. 741–74;Lindstrom, Diane, Economic Development in the Philadelphia Region, 1810–1850 (New York, 1978); and Parker, William N., “New England's Early Industrialization: A Sketch,” in Kilby, Peter, ed., Quantity & Quiddity:Essays in U.S. Economic History (Middletown, CT, 1987), pp. 1746.

3 North, Douglass C., The Economic Growth of the United States, 1790–1860 (Englewood Cliffs, NJ, 1961), pp. 135–55.For 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.Neither 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 19671968), pp. 1235;Ransom, Roger L., “A Closer Look at Canals and Western Manufacturing,” Explorations in Economic History, 8 (Summer 1971), pp. 501–8;Ransom, Roger L., “A Rebuttal,” Explorations in Economic History, 9 (Summer 1972), pp. 425–26;Niemi, Albert W. Jr, “A Further Look at Interregional Canals and Economic Specialization: 1820–1840,” Explorations in Economic History, 7 (Summer 1970), pp. 499520;and 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.

4 Niemi, Albert W. Jr, State and Regional Patterns in American Manufacturing, 1860–1900 (Westport, CT, 1974), table 2, p. 9; and Taylor, George Rogers, The Transportation Revolution, 1815–1860, Economic History of the United States, vol. 4 (New York, 1951), pp. 243–49.

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

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;Kirkland, Edward C., Industry Comes of Age: Business, Labor, and Public Policy, 1860–1897, Economic History of the United States, vol. 6 (New York, 1961);Davis, Lance E., Easterlin, Richard A., and Parker, William N., American Economic Growth (New York, 1972);and Temin, Peter, Iron and Steel in Nineteenth-Century America (Cambridge, MA, 1964).

7 Hoover, Edgar M., The Location of Economic Activity (New York, 1948), pp. 4244.

8 Warren, Kenneth, The American Steel Industry, 1850–1970: A Geographical Interpretation (Oxford, 1973).

9 Niemi, State and Regional Patterns, tables 2–5, pp. 9–15.

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.

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.

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.

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.See 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;also see Engerman, Stanley L, “The Economic Impact of the Civil War,” Explorations in Entrepreneurial History, 2nd series, 3 (Spring/Summer 1966), pp. 176–99.

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

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.”

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;and 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. 4754.

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);Fishlow, Albert, American Railroads and the Transformation of the Ante-Bellum Economy (Cambridge, MA, 1965);Hunter, Louis C., Steamboats on the Western Rivers (Cambridge, MA, 1949);and Scheiber, Harry N., Ohio Canal Era: A Case Study of Government and the Economy, 1820–1861 (Athens, OH, 1969).

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

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;and 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.

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

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.

22 Ibid., pp. 47–48.

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

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.

25 Berry, Thomas Senior, Western Prices Before 1861: A Study of the Cincinnati Market (Cambridge, MA, 1943), pp. 520–29;Davis, Easterlin, and Parker, American Economic Growth, table 13.12, p. 501;and 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.

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.Ibid., 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.

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

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.Hunter, Steamboats on the Western Rivers, table 2, p. 49, and appendix, table 2, pp. 644–45.

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. 85117;Hoover, The Location of Economic Activity;Isard, Walter, Location and Space-Economy (Cambridge, MA, 1956);Walsh, Margaret, “Pork Packing as a Leading Edge of Midwestern Industry, 1835–1875,” Agricultural History, 51 (10 1977), pp. 702–17;and Weber, Alfred, Theory of the Location of Industries, trans. by Friedrich, Carl J. (Chicago, 1929).

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;Reiser, Catherine Elizabeth, Pittsburgh's Commercial Development, 1800–1850 (Harrisburg, 1951);Scheiber, Ohio Canal Era;and Taylor, The Transportation Revolution, pp. 156–69.

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

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.

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.

35 Meyer, “A Dynamic Model of the Integration of Frontier Urban Places”Pred, Urban Growth and City-Systems;and Vance, James E. Jr, The Merchant's World: The Geography of Wholesaling (Englewood Cliffs, NJ, 1970).See 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.

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.

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

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.

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.

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; also see Lazonick, William and Brush, Thomas, “The ‘Horndal Effect’ in Early U.S. Manufacturing,” Explorations in Economic History, 22 (01 1985), pp. 5396.

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.

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; and James, John A., “Structural Change in American Manufacturing, 1850–1890,” this JOURNAL, 43 (06 1983), pp. 433–59;Mack, Jeremy, “Industrial Structure and the Emergence of the Modern Industrial Corporation,” Explorations in Economic History, 22 (01 1985), pp. 2952; 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.

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

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.

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;see 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.

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

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

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

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.

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. This is computed from Hounshell, From the American System to Mass Production, table 4.1, p. 161.

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.

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