In a word, the postbellum economy of the United States was evolutionary. The growth in entrepreneurship produced a diversity of industries and an expansion of enterprises which broadened the economic base. Several facets illustrated this transformation such as the emergence of new industry in new locations, the consolidation of some industries from many small producers into few large ones, and a new conception of the workforce. The Civil War spurred new industries and forged new economic ties while breaking old bonds and devastating regions. States such as New York, Pennsylvania and Connecticut were already developing an industrial economy, but it was postwar that the future great manufacturing centers in the Midwest and the South also began to develop. The American Industrial Revolution was more than the birth of a factory system geared to produce a limited variety of products on a massive scale. Rather, the economic possibilities provided opportunities for entrepreneurs to capitalize on the growing demand for new products in new markets. While legal, cultural, and social restrictions remained, these barriers were nevertheless sufficiently low to allow the formation of new economic ventures. Railroads provided a cost-effective means to move resources and products to formerly commercially unprofitable locales. The workforce was transforming due to impact of expanded education, particularly collegiate programs. The innovation inherent in a free-thinking society transformed the nation and produced an economy whose capabilities were only hinted at by what had taken place in Great Britain a century earlier.
The US Census of 1860 and 1900 provides an intriguing means for examining the economic activity in the postbellum period (1865 - 1890). Comparing the census data reveals a dynamic transformation of commercial activities and widespread economic growth across the nation. Both censuses recorded the number of establishments in a particular field, labor employed, capital invested and the annual production value in dollars. Monetary comparisons are straightforward due to inflation remaining relatively flat for the period. The shipbuilding industry provides one such fascinating portrait of what was occurring in the postbellum era. Pre- Civil War, American shipbuilding had lagged behind Europe, especially Britain, and many foreign built vessels plied American waters.[1] The postbellum period saw a growth in shipyards as entrepreneurs expanded existing sites and in regions without a history of the industry. In 1860, the vast majority of American shipbuilders were in New York (ninety-three establishments, producing $3,125,711 worth of product annually), Massachusetts (sixty-nine, valued at $1,678,605) and Pennsylvania (103, $1,219,855.) Along the gulf coast, only Louisiana had a significant industry with 10 establishments (mostly riverboats) worth $602,950; Texas, Mississippi and Florida had none.[2]
By 1900, the situation had changed dramatically. In the category “ship and boat building (wooden)”, Florida now rivaled Louisiana with fifteen establishments each, valued at $254,991 and $250,307 respectively. Mississippi was a close third with thirteen establishments, worth $115, 744. Texas had seven, Alabama six, and Georgia four producing a combined $390,188. The postbellum expansion of the rail network enabled entrepreneurs to utilize formerly unsuitable, but geographically favorable locations such as Mobile, AL, and Beaumont, TX. Construction materials could now be transported cost effectively to coastal sites that lacked essential resources. However, this expansion also negatively impacted New Orleans' shipyards as the Mississippi River lost some of its volume of trade. Elsewhere, New York and Massachusetts maintained their top spots as producers by more than doubling their capacity during the era; New York had 218 establishments, worth $6,138,915 and Massachusetts had 122, worth $1,138,830. Only Pennsylvania experienced a drop in the number of wooden shipbuilders (now thirty-five, worth $407,763.) However, this decrease was more than made up by three “ship and boat building (iron and steel)” enterprises producing $14,085,395 annually, a sign of things to come as iron replaced wood. Iron ships required new kinds of shipyards and entrepreneurs realized that where timber could be shipped so could steel. Entrepreneurs recognized an opportunity for southern shipyards that would bear fruit within thirty years.[3]
The censuses exhibited other shifts in economic activities. For example, the 1860 census noted that in the Southern states (soon to be Confederacy) there were forty-one firearm manufacturers, generating $72,652 annually. By contrast, the northern and midwestern states (the Union) had 188 firearm manufacturers valued at $2,272,038, an important consideration with the onset of the Civil War.[4] Yet by 1900, only thirty-two manufacturers remained in the entire nation producing $5,444,659 worth of firearms. Twenty-six of these businesses resided in Connecticut, New York and Massachusetts with the remainder spread out in other states; as a legacy of the war, none were in the South.[5] The decrease in the number of firearm manufacturers could be interpreted as a reflection of a shift in demand. However, the increase in production valuation suggests something else: a consolidation from numerous small firms into fewer, but larger ones. Residual wartime production capacity and the railroad made it economically feasible for a few manufacturers to reach a larger, geographically dispersed market with affordable products.
The 1860 and 1890 census also revealed an economic evolution occurring with labor. For example, the 1860 census recorded only four manufacturers of “electro-magnetic machines” (the only reference to electrical power) employing thirteen people in a $59,000 industry. By 1900, electrical power had grown to 2.7% of the national energy used in manufacturing and was gradually but definitely replacing steam power. [6] In all states, there were 1,162 firms identified as “electrical construction and repair”, valued at $15,907,420. Of the 6,748 employed persons, 254 were women. Interestingly, 156 of these ladies were categorized as “salaried officials, clerks, etc.” as distinct from “wage-earners” of whom ninety-eight were female. Small numbers to be sure, but indicative of the change underway in labor demographics.[7] To this point, the 1900 census revealed the rise of the American “professional”: the engineer, the administrator, the bureaucrat, etc. The new industries required a new kind of employee and improvements in education, especially collegiate, met this demand. In turn, this new, highly productive and essential worker demanded a “salary” which was more lucrative than “wages.” In the shipbuilding industry, a salaried employee in Louisiana earned 55.5% more than the wage-earner; in New York, the difference was 116.2%.[8] Empowered by their level of personal education, men and women embraced new careers that transcended previous ideas about work and transformed American society in the process.
The postbellum era was evolutionary for the American economy. How people worked and what they produced in 1865 became more and more antiquated to American workers by 1900. Among others, railroads and education were two of the crucial factors shaping developments. Within another fifty years, the economic landscape would be alien to the antebellum worker. A period of transition, the postbellum period was a time ripe with opportunities for entrepreneurs who laid the foundations for 20th century America. If evolutionary is one word to describe the postbellum period, opportunity is another equally applicable description.
Sources
Roland, Alex, W. Jeffrey Bolster, and Alexander Keyssar. The Way of the Ship: America's Maritime History Reenvisoned, 1600-2000. Hoboken, NJ: John Wiley and Sons, 2008.
Thiesen, William H. Industrializing American Shipbuilding: The Transformation of Ship Design and Construction, 1820-1920. Gainesville, FL: University Press of Florida, 2006.
US Department of the Interior, Census Bureau. Manufactures of the United States in 1860; Compiled from the Original Returns of the Eighth Census under the Direction of the Secretary of the Interior. Washington D.C.: Government Printing Office, 1865. PDF. https://www.census.gov/library/publications/1865/dec/1860c.html
US Department of the Interior, Census Bureau. Manufactures Part 1: United States by Industries. Vol. 7. Statistical Abstract of the United States: 1901. Twenty-Fourth Number. Washington D.C.: Government Printing Office, 1902. PDF. https://www.census.gov/library/publications/1902/dec/vol-07-manufactures.html.
------. Manufactures Part 2: States and Territories. Vol. 8. Statistical Abstract of the United States: 1901. Twenty-Fourth Number. Washington D.C.: Government Printing Office, 1902. PDF. https://www.census.gov/library/publications/1902/dec/vol-08-manufactures.html.
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New York History Walks. "Seaport-1897-1924." Street of Ships. Last modified August 4, 2012. https://nyhistorywalks.wordpress.com/2012/04/04/street-of-ships/.
[1] William H. Thiesen, Industrializing American Shipbuilding: The Transformation of Ship Design and Construction, 1820-1920 (Gainesville, FL: University Press of Florida, 2006), 44 - 45; Alex Roland, W. Jeffrey Bolster, and Alexander Keyssar, The Way of the Ship: America's Maritime History Reenvisoned, 1600-2000 (Hoboken, NJ: John Wiley and Sons, 2008), 197 - 198.
[2] US Department of the Interior, Census Bureau. Manufactures of the United States in 1860; Compiled from the Original Returns of the Eighth Census under the Direction of the Secretary of the Interior. Washington D.C.: Government Printing Office, 1865. PDF. 60, 200, 256, 294, 417, 543, and 594. https://www.census.gov/library/publications/1865/dec/1860c.html.
[3]US Department of the Interior, Census Bureau, Manufactures Part 2: States and Territories. Vol. 8. Statistical Abstract of the United States: 1901. Twenty-Fourth Number (Washington D.C.: Government Printing Office, 1902) PDF, 10, 128, 140, 304, 370, 468, 604, 768, 874. https://www.census.gov/library/publications/1902/dec/vol-08-manufactures.html.
[4] Census Bureau, Manufactures of the United States in 1860, 679, 692, 706, 716. PDF. https://www.census.gov/library/publications/1865/dec/1860c.html
[5] US Department of the Interior, Census Bureau, Manufactures Part 1: United States by Industries, Vol. 7, Statistical Abstract of the United States: 1901. Twenty-Fourth Number (Washington D.C.: Government Printing Office, 1902), 198 – 201. PDF. https://www.census.gov/library/publications/1902/dec/vol-07-manufactures.html.
[6] Census Bureau, “Chapter 4: Power Employed in Manufactures,” Manufactures Part 1, CCCXV. https://www2.census.gov/library/publications/decennial/1900/volume-7/volume-7-p5.pdf.
[7] Census Bureau. “General Tables: Specified Industries – Comparative Summary,” Manufactures Part 1, 186 – 189. https://www2.census.gov/library/publications/decennial/1900/volume-7/volume-7-p9.pdf.
[8] Census Bureau, Manufactures Part 2: States and Territories, 304, 604. https://www.census.gov/library/publications/1902/dec/vol-08-manufactures.html.
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