Chapter 8: Creating a Republican Culture
I. The Capitalist Commonwealth
A. Banks, Manufacturing, and Markets
1. A British visitor reported that America was a “Nation of Merchants,” in 1798 and they made many from the French Revolution. 2. Fur trader Jon Jacob Astor and merchant Robert Oliver were the nation’s first millionaires. 3. Oliver started from an Irish-owned linen firm in Baltimore but then gained his money from trading West Indian coffee and sugar. 4. Astor came from Germany to New York in 1784 and gained wealth from trading fur with China 5. To finance the trading system, America needed a banking system which was created with the charter of North America in 1781 in Philadelphia. The bank would lend money to help the traders and store their money. 6. The Federalists created the First Bank of America to issue notes and make commercial loans 7. The bank had gained a eight percent interest annually, but in 1805 Jefferson declaredthe Bank as unconstitutional. 8. The bank wasn’t renewed in 1811 when its charter expired, so instead states began to create their own banks. 9. In 1816, Congress created their 2nd Bank of the United States, but at that time there were 246 state-chartered banks with tens of thousands of stockholders and $68 million in banknotes and circulation. Yet many of the banks were inadequate and shady. 10. The banking policies saved the United States from the Panic of 1819, but the major cause of the Panic was the 30% drop in world agricultural prices after the Napoleonic War. 11. Between 1818 and 1819, the price of cotton per pound fell from 34 cents to 15 cents in South Carolina. When this happened, planters, and farmers, couldn’t repay their debts to the merchants, storekeepers, and banks, bankrupting those businesses. 12. The Panic of 1819 showed that artisans, merchants, and farmers depended for prosperity on the market economy. 13. Before 1800, New England artisans worked part time and sold their handicrafts locally. In Massachusetts, many men were both farmers and artisans. In the Middle Atlantic colonies, artisans traded locally. 14. By 1820, artisans in Pennsylvania, Maryland, and Massachusetts sold their products nationally. 15. American entrepreneurs encouraged the expansion developing rural manufacturing networks like in Europe. 16. European merchants bought raw material and farm families would be hired to process them, and sold the finished item to the regional or national market 17. The New England peddlers carried finished products to the South and were deemed the hard-bargaining “Yankees” 18. New technology didn’t do much though the New England and Middle Atlantic merchants had small mills to power machines that combined wool and later cotton. 19. Before the 1820s, household-based outwork system was used where the farm women and children spun strands into thread and yarn on foot-driven spinning wheels. Men sometimes used the foot-powered looms to weave the yarn to cloth. 20. In 1820, there were more than 12,000 household workers working full-time weaving woolen cloth, which was pounded flat and smoothened water-powered mills. 21. The outwork production created mechanized factories and there were 8,000 factories in 1809 to 333,000 in 1817. 22. Ambitious farmers switched from crops to raising livestock and selling the animal products and others rose sheep to sell raw wool to textile factories 23. The factories altered the environment creating foul odors from stockyards and tanning pits. Thousands of acres of trees were cut down every year by the tanners. By raising livestock, the land was created to pastures of meadows, and by 1850 most of the forests in New England were gone. 24. Though the farmers were able to earn more, the environment began to dwindle and most fish were unable to reach their mating grounds. 25. Rural families including the children worked harder and harder and the farmers began to...
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