The Market RevolutionChapter 8:i

In a very basic way

water transformed the young

economy of the U.S.

The power harnessed from these moving waters ran the new

machines in factories that sprang up in the early 1800s.

After the War of 1812, the U.S. economy soared although most were

farmers.

The way Americans made, bought, and sold goods is

known as the Market Revolution.

The market Revolution was fueled by the American genius for

inventions.

Samuel Colt patented his revolving pistol in 1836.

Manufacturing-the making of products by machinery.

In 1813 group of businessmen led by a Boston merchant

named Francis Cabot Lowell built a factory in Waltham,

Mass. to manufacture

textiles.

Lowell’s was the world’s first truly centralized textile factory. All the tasks involved in making a product

were carried out in one place.

From the 1820s to 1840s, manufacturing industries arose in

New England and become the backbone of the North’s economy.

In 1817 New England’s textile mills produced 4 million yards of cotton

cloth. 1840 it was 323 million.

Free enterprise system--an economic system in which

companies compete for profits. This system, also is called

capitalism.

In 1771, Adam Smith outlined the free

enterprise system. He argued that businesses

should follow the market forces of supply and demand rather that government regulation.

Free enterprise expanded greatly in the

United States during the early 1800s.

• Today’s concept of capitalism> The federal gov. and state gov. now play important roles in the economy, such as regulating business to protect workers and consumers. Yet free

enterprise remains the heart of the American

economy and the foundation of American

prosperity.

For most Americans,

“going to work” in the 1700s

generally meant working in the home or around

the farm.

In the 1800s the building of new factories sharply increased the

demand for people to work outside the home.

Banks provided capital-wealth that can be invested to produce goods

and make money.

The first banks appeared in the U.S. in the 1780-90s. By the 1830s

hundreds of new banks were built.

In the 1800s, states did not restrict bank’s runaway lending. The new

banks often made bad loans to people who could not repay them.

The gov. did not issue paper money. Most preferred coins, gold, or silver.

The most common form of money was the bank note-a piece of paper

that banks issued to their customers.