FREE ESSAY ON ECONOMIC PROBLEM

ECONOMIC PROBLEM

Growth of NYS Business
May 8, 2000
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. 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
Parker invested 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.