THE GROWTH OF THE FACTORY
Economic growth was a key component of Henry Clay’s American System, and in the aftermath of the War of 1812, measures were taken to expand American industry. American industries were protected by the Tariff of 1816, which raised import tariffs by 25 percent. At the same time state governments began improving road, river, and canal transportation systems.
Before 1820 almost ail products made in America were completed using a system borrowed from Europe called the putting-out system. Under this system merchants would buy the raw materials, recruit dozens, or in some case hundreds, of farm families to do the work, and then sell the finished product. Many shoes in New England were made in this manner; women and children would make part of the shoe, which would be finished by experienced shoemakers.
Beginning in the late 1780s the textile industry started to use power- driven machines and interchangeable parts. All power in these early factories came from water, so the early factories all were located along rivers. Most were located in New England or the Middle states. In the 1790s factories like those in Lowell, Massachusetts, began to weave cotton imported from the south. With the introduction of the cotton gin in the same decade, more cotton became available, and production boomed. By 1840 the textile industry employed nearly 75,000 workers, with almost half of them women.
The workforce of many of the early factories was hired using the “Lowell System.” Young women from surrounding areas were brought in to work. They worked for a pittance, worked in horrible conditions, and slept in dormitories provided by the factory. The young women saw this as temporary work, as many went home after several years after making some money (and in some cases spending it as well). This constant turnover of workers kept worker demands low, which pleased the factory owners. An economic middle class of manufacturers, bankers, and their families began to grow during this period. Factory towns such as Lowell, Massachusetts, began to grow rapidly in size.
An economic panic hit the United States in 1819, caused by the recovery of European economies after the Napoleonic wars, by money policies of the National Bank, and by the efforts of officials at several branch banks of the National Bank to enrich themselves through speculation. It was not until the 1830s that worker strikes began, along with drives to influence state legislatures to shorten the workday, A real labor movement did not develop in the textile industry until the 1840s.