Wednesday, February 3, 2010

Economic Conditions in 1789 (1)

Before entering upon an account of the financial measures of the new government a brief estimate should be made of the economic conditions of the country. The population in 1790 was nearly 4,000,000, of which about one-sixth was colored, for the most part slaves. It was scattered as a fringe along the Atlantic seaboard from the south of Georgia to the north of Maine; in no latitude did it extend into the interior as far as 500 miles, Albany was a frontier town and Pittsburgh a pioneer settlement. The population was still largely rural; there were but six cities of 7500 or more inhabitants, and the largest of these, New York, had only 33,000 people. Work and industry were the rule of life throughout the country. Agriculture busied nine families out of ten; land was cheap and bought on easy credit, for there were unlimited unsettled tracts stretching out to the West, partly in State lands, partly in the national domain. The value of property employed in agriculture was far greater than that devoted to manufactures or commerce. Excepting the slave plantations of the South, the farm-holdings were small, and the cultivation of each was carried on by members of the family with little hired labor. This developed throughout the North a general equality of political and social interests, if not of economic welfare.

Little change had come about in agricultural products since the colonial period. In the South, particularly in Georgia and the Carolinas, rice of a superior quality was raised in large quantities and formed an important export; the same States also produced indigo for foreign shipment as well as for domestic use. Tobacco was a staple product throughout the South from the borders of Pennsylvania, and contributed a generous share of the exports. The wheat country extended from Virginia to the western end of New England, and American flour had an established reputation in the West Indies. Hemp and flax were raised in large quantities and formed the basis of important manufactures. Sheep for their wool, cattle, and dairy products also contributed to the prosperity of the farmer. The export of salt provisions was increasing. One of the most important economic resources was still the forests; the naval supplies, especially the tar, pitch, and turpentine of North Carolina, showed no exhaustion; and lumber and timber products were shipped from almost all the States. The clearing of the forests also yielded a by-product of pot and pearl ashes, the sale of which frequently tided the pioneer over the earlier months of privation.

Although agriculture was everywhere the principal occupation, the rapid expansion of settlement caused an increasing demand for mechanics to build the houses, barns, and workshops ; and progress was making in some lines of manufactures. The growth of manufactures was especially marked after the establishment of peace; it is estimated that in 1787 the importation of manufactures into Massachusetts was only one-half what it was twenty years before. As soon as the restrictions of the colonial system were removed, the genius of the American people was displayed in every department of mechanical activity then known, witness the concise description given by Hamilton in his memorable Report on Manufactures in 1791, as well as the equally authoritative papers of Tench Coxe, in which the capacities of the new republic are defended from the aspersions of English critics, who looked for an easy industrial subjugation, even if political supremacy were lost.

To be continued: Economic Conditions in 1789 (2)

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