Growth of NYS Business
April 17, 1996
For a number of reasons, business enterprise in New
York grew by leaps and bounds between 1825 and 1860.


New York’s growth between the years 1825 and 1860 can be attributed to a number
of factors. These include but cannot be limited to the construction of the Erie
Canal, the invention of the telegraph, the developed of the railroads, the
establishment of Wall Street and banking, the textile, shipping, agriculture and
newpaper industries, the development of steam power and the use of iron products.

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On October 26, 1825 the Erie Canal was opened. The canal immediately became an
important commercial route connecting the East with the Ohio and Mississippi
Valleys. With tht time of travel cut to one-third and the cost of shipping
freight cut to one-tenthof the previous figures, commerce via the canal soon
made New York City the chief port of the Atlantic.The growing urban
population and the contruction of canals, railroads and factories stimulated the
demand for raw materials and food stuffs.In 1836 four-fifths of the tonnage
over the Erie Canal came from western New York (North, 105).Much of this
cargo was in the form of agriculture goods.


The farmer become a shrewed businessaman of sorts as he tended to produce
whatever products would leave him the greatest profit margin. The rise of the
dairy industry was by far the most significant development in the agricultural
history of the state between 1825 and 1860. Farmers discovered that cows were
their most relliable money-makers, since both the domestic and foreign market
kept demanding more dairy products (Ellis, 273). Price flucuations became
increasingly important for the farming population between 1825 and 1860. Prices
rose from the low level of the early 1820’s until the middle 1830’s and the
farmer’s shared in the general prosperity (271). Although the rapid
industrialization and urbanization of New York had a great deal to do with the
success of agricultural markets sporadic demand from aboard as a result of the
Irish famine, the Crimean War and the repeal of the Corn Laws in England also
contributed(North, 141). During this period Ohio, Pennsylvania, New York and
Virginia, in that order were the leading wheat growing states. Between the
years 1840 and 1850 New York ranked first in the production of beef.


The absence of politic party differences on issues related to the the growth of
democracy existed in regard to the foremost economic questions, there was
absolutely no partisan division evident in the movement to incorporate new
financial institutions; rather , the primary factors , which the legislators
examined, concerned value, feasibility, profit and the location within the state.

Dozens of turnpike proposals, most of which werebacked by the Republicans,
passed the legislature; but the Federalists cooperated, seeing the chance for
profits. Prominent Federalists like John Rutherfurd, John Neilson, William
Paterson, John Bayard, and James Parkerinvested susstanial sums in the
turnpike business. There were numerous Republicans who were also vitally
interested in the turnpike business (Kass, 150).Bipartisan support also
accompanied plans for the construction of bridges and canals. All of the parties
contained a large number of adherents from from every level of economic well-
being in society. This helps to expain the absence of any clear-cut party
differences on the major economic issues of the such as the chartering of banks,
the protestive tariff, internal improvements, the development of manufacturing,
and the promotion of superior agricultural techniques. Each politcal faction
had segments both pro and con on most of these questions, and, inall cases it
was opprtunism, the desire for profits, which was decisive in determining one’s
political position on these economic issues(175). New York’s economic growth can
also be attributed to the invention of the cotton gin. Cotton had become a boom
crop in the south, however, plantation owners were either too engrossed in the
production of their crops or too unschooled in business techiniques to handle
its distribution. Some just did not want to be bothered. This opened thee door
for agents representing New York shipping firms who were only too happy to help
them out – for a fee. This scheme not only earned the New York merchants a
handsome profit but also solved the problem that without cotton the ship owner
would be hards preesed to find adequate cargoes for their return voyages. And
so it came about that New York in the nineteeth century became the nation’s
foremost shipper of cotton(Allen, 108-109). The cotton shipments entering New
York harbor were brought to textile mills for processing.A group of New york
capitalist estashlished the Harmony Cotton Manufacturing Company in Cohoes. A
heavy investment of capital caused the rapid growth of the factory system, which
was mass production with integration of processes and produced a high quality
cotton cloth as well as other textiles(Ellis, 266).


This set the scene for an industrial society by widening the market,
manufacturing increased rapidly throughout this period, although development
varied enormously from industry to industry. Often developments were due to
improvements in technical processes such as the adoption of steam power and
the use of anthracite coal instead of charcoal by the iron industry.The
metallurgical industries emplyed thousands for skillful workers who produced a
variety of iron and steel products, such as farm machinery, pistols, sewing
machines, clocks and stoves. These products were being produced using standard
parts and multiple quantities(267). The iron industry made rapid progress as a
result of this processas well as the expansion of the railroad industry which
created increased demand for iron products. It can therefore be surmized that
often growth in a one industry would cause increased demand for another
industry’s product, hence the boom of both industries.The growth of
manufacturing was the main impetus to expansion , the industrial base broadened
during this period, reflecting the overall improvement in factor endowments for
manufacturing. Equally important was the cost decline in transportation, which
opened up new sites for manufacturing development and reduced transport costs
for existing firms (North, 208). Production increases required a retail market.

In November of 1858, R.H. Macy established a department store in New York City
successfully implementing a fixed price policy on a large scale developed by
small New York stores since 1840 establishing a n American retail sales custom
(Spann, 125).


Some additional elements that should mentioned include the founding of the New
York Tribune by Horace Greely, the development of the telegraph by Samuel Morse,
the colaboration of six New York newspapers who joined to pay telegragh costs of
foreign news relayed from Boston, and the establishment of a New York
clearinghouse to facilitate banking operations.


Research reveals that the reasons for the success of New York’s business
enterprise between 1825 and 1860 were enumerous with no reason weighting more
heavily than another with the exception of as Ellis states that, “Plank roads,
railroads, canals, steamships-all had revolutionary effects on the economy of
New York. The predominately self-sufficent farmer of pioneer days was gradually
tramnsformed into a specialized commercial farmer sensitive to every shift in
the markets. The isolation of many rural communities was breaking down as
citzensand goods flowed freely in and out. Merchants in both the upstae and
metropolitan region, recognizing the crucial role of canals and railroads,
looked with satisfaction upon the finest and most actively expanding
transportation network in the country. New York grew steadily in population,
wealth, and trade largely to the splendid system of water and rail
transportation promoted by its citizens in this period.”, but all entwinding to
create a boom of business expansion during this period. It appeared as if we
were developing not only as a state but as a civilized nation whenever this
development would be curtailed by the onsloat of a civil war.


Works Cited
Allen, Oliver E. New York, New York: A History of the World’s Most Exhilarating
and Challenging City. New York: Macmillan, 1990.


Ellis, David M., et al. A History of New York State. Ithaca: Cornell UP, 1967.


Kass, Alvin. Politics in New York State, 1800 -1830. Syracuse: Syracuse UP,
1965.


North, Douglas C. The Economic Growth of the United States, 1790-1860. New
York: Norton, 1966.


Spann, Edward K. The New Metropolis: New York City, 1840-1857. New York:
Columbia UP, 1981.


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