Wedding of the waters, p.34
Wedding of the Waters, page 34
The Erie Canal itself made a significant contribution to the pace of technological innovation. The most impressive and reliable evidence of the developing Industrial Revolution is in the growth in the number of patents—the legal foundation of innovation and economic development. In a detailed study of new patents granted by the U.S. Patent Office from 1790 to 1846, Kenneth Sokoloff, an economic historian at the University of California, Los Angeles, points out Patent Office that all the places with high patenting rates were either metropolitan centers or located close to a navigable waterway: “Perhaps the most vivid example is New York, where the completion of the Erie Canal in 1825 seems to have sparked big changes in the composition of output and a sharp rise in patenting along its route.”32
Change of this nature was revolutionary, in every sense of the word. As long as the movement of human beings and produce—primarily agricultural—was limited to rivers or was ambling along in a trundling and rickety wagon, as it had been for countless centuries, no one thought very much about change. But as a waterway, the Erie Canal immediately increased the expected return to inventors working near a large pool of easily reachable potential customers, competing suppliers, and a growing stream of information.33
The impact of the patenting increased with the passage of time. While the Patent Office issued approximately two hundred patents a year from 1810 to 1825, patenting skyrocketed after the opening of the Erie Canal, hitting a pre–Civil War peak of over seven hundred patents in 1835.34* New York State led the nation in new patents per capita in almost all sectors of the economy, although southern New England took the lead in manufacturing after 1830—but even then New York remained a close second.
A firsthand report on these trends is left to us from the records of the New York Life Insurance and Trust Company, whose board of directors included such luminaries as John Jacob Astor, Henry Remsen, and the hardware merchant and railroad promoter Erastus Corning. In 1832, the company sent Nicholas Devereaux of Utica to look over business conditions along the route of the canal all the way out to Buffalo. Devereaux’s report was unqualifiedly enthusiastic, noting the increase in population, the growth in cities and towns, and the prosperity of the farms. He was especially impressed with the proliferation of flour mills and “manufacturies.” Summing up the situation, he could only flatter his superiors for being so “sagacious” in recognizing the high investment returns available in the canal area.35
Devereaux ascribed the dynamics of the canal economy to “easy access to market.” He had it exactly right. The manufacturing activities that stemmed from patenting and technological innovation needed large and growing markets to justify the investments and risks they involve. The Erie Canal provided the perfect linkages between expanding markets in New York City, Albany, and Buffalo and the territory in between. In time, these linkages spread to the urban centers to the west from Cleveland and Detroit out to Chicago.
All of these developments—the growth of population, the extension of the canal’s stimulus to the new lands in the west, and the accelerated pace of technological change—combined to create a multitude of new markets large enough to support production sold to buyers elsewhere or consuming products from other markets. Commercialization of economic activity spread rapidly, from simple goods for household use to the manufacture of steam engines and heavy engineering. In contrast, as we have seen, home production of textiles in New York State fell rapidly after the canal opened. Farming, too, was being transformed from “a way of life” to farming as a profit-seeking business.36 There was an internal dynamic to these trends. As farming ceased feeding just the family and became more of a business, farmers with newfound cash income now joined their urban neighbors as ready customers for the tempting products coming from the factories.
One of the most careful students of the economics of this period, Columbia University historian Carter Goodrich, suggested in his 1960 study of public improvements that the opening of the Erie Canal was the dividing point between the periods of the “Frontier without the Factory” and the “Frontier with the Factory.”37 Manufacturing did score spectacular growth along the canal and, courtesy of the canal, through other parts of New York State. Factories for ironworks, hats, and textiles flourished in Albany, while spinning mules and power looms were churning out textiles in Rochester. There were sixteen textile factories in Oneida County in 1827, employing seven hundred people; by 1832, there were twenty cotton mills, with over two thousand employees. In 1827, the nation’s first hardware store, dealing mainly in American merchandise, opened in New York City.38 The state had 13,667 manufacturing establishments in 1835, with sales totaling $59 million—already an increase of 58 percent since 1814. Just five years later, in 1840, revenues from manufacturing production had jumped by more than 60 percent to $96 million, and they would hit $237 million in 1850.39
Average sales of only $4300 per establishment in 1835 sounds tiny to our ears today, even when translated into roughly $43,000 in current purchasing power. But these firms were still single-unit enterprises with only a handful of employees—although they were also becoming increasingly specialized, as Adam Smith would have predicted. In manufacturing, the owner and manager was in most cases a former artisan—such as a blacksmith, tinsmith, or plumber—who was now using advanced equipment for the first time to make products varying from stoves and grates to gas fixtures and steam engines. In trade, middlemen were beginning to operate between the manufacturer and the retailer, or between the importer and the ultimate destination of the goods. These little business firms were formidable economic units for their own time, and it is interesting to note that the Industrial Revolution and technological progress came along a lot faster than changes and innovation in the structure of the business firm.40
The influence of a shift to industrialization was especially notable in the cities on the canal. For example, Rochester was famous for its many mills and its dominance over the grain and flour trade, but the expansion in manufacturing was equally impressive. In 1835, a merchant named Henry O’Reilly could proclaim that “the flouring business for which Rochester is at present most celebrated, is by no means of such importance…as the other branches of manufactures.”41 But manufacturing would not have developed in Rochester without the Erie Canal’s communications system that opened the city to markets large enough to justify the capital investments in factory construction and equipment.
Edward Peck’s paper mill flourished in response to the increasing numbers of printers and the expanding market for both newspapers and books. The Cunningham carriage factory was nationally recognized and survived nearly a hundred years, ending its career as an early manufacturer of automobiles. Lewis Selye’s machine shop turned out fire engines and railroad cars for other cities and towns. David Barton’s Hydraulic Building sold water power to the toolmakers on its upper floors, who in turn supplied the needs of the growing city and the prosperous agricultural communities beyond. Tailors who had begun their careers as craftsmen sewing clothing to order transformed the men’s clothing business in Rochester into a mass production industry, which flourished as a source for the entire country into the late twentieth century.*
The canal also transformed Syracuse from a small village into a major industrial center. Situated just about halfway between Albany and Buffalo, the area around Syracuse had been a source of salt since the 1700s. Salt has been one of the most essential raw materials in human history, because of its unique quality of preserving foods and also for curing raw meats such as pork. By opening up a transportation system that could move tons of salt at a time from the Syracuse area, the United States was able to replace the substantial imports of salt from the Turks Islands, Portugal, and the Cape Verde Islands.42
The community that was to become the city of Syracuse was originally a couple of houses and a tavern. In 1800, Joshua Forman—the New York State assemblyman who in 1808 played a crucial role in starting legislative action for the Erie Canal—had moved into the vicinity to pursue a law practice. Forman’s efforts for the canal ended up paying big dividends for his community, and in 1825, the same year the canal opened, Syracuse was officially incorporated as a village; by no coincidence, its chief executive was Joshua Forman, on hand to officially welcome De Witt Clinton when he came through on the Seneca Chief on his way to the Wedding of the Waters.
Originally, salt from the Syracuse area had moved west by pack mules to Lake Erie. But the canal immediately stimulated a steep increase in the demand for salt in the west, not just because of the growing populations of humans but also because of the urgent need for salt in curing the burgeoning supply of pork. The number of hogs to be slaughtered and cured, in turn, was increasing so briskly because they were a market for excess supplies of grain growing so abundantly in the new western lands.
The combination of the Erie Canal and the salt deposits around Syracuse created a large industrial center out of what had been described by an 1820 visitor as “so desolate it would make an owl weep to fly over it.”43 Five years after the opening of the canal, the population of Syracuse had tripled, from 250 to about 750, but that was only the beginning. Once the canal was in operation, salt could be moved in bulk and at low cost to communities to the east as well, and the salt enterprises grew rapidly. By 1850, the population of Syracuse had grown to 22,000—almost all of it thanks to salt (and not incidentally to Joshua Forman). Huge vats and mechanized refineries turned out rising quantities of salt for many uses in addition to food and preservation, including major chemicals such as soda ash, caustic soda, and bicarbonate of soda.
The chemical industry based on salt in Syracuse grew so large it polluted nearby Lake Onondaga to the point of killing off almost all life in its waters. In May 1918, the section of the old Erie Canal running through the city was closed and covered with a boulevard—appropriately named Erie Boulevard; the route of the modern barge canal was in any case well away from the city center. Not long after, the salt industry disappeared as well. But Syracuse would continue to prosper even without salt: by 1918, its broadly based manufacturing sector produced everything from clocks and china to soda ash, shotguns, steam engines, men’s shoes, and radiators.
At the canal’s western terminus, Buffalo grew to be the greatest inland port in the United States, as Great Lakes shipping going east transferred its cargoes to the Erie Canal while canal traffic headed west was conveyed to ships waiting on Lake Erie. The huge volume of grain traffic from the west created the largest and most active grain-transfer port in the world there.
In 1842, Joseph Dart’s invention of the grain elevator revolutionized the handling of wheat forever more. Before this, laborers down in the holds of lake cargo ships had to shovel the wheat into barrels, which Irish stevedores carried on their backs to warehouses. Dart’s invention consisted of a steam engine moving a vertical belt to which buckets were attached. On the way down, the buckets went into the ship’s hold and scooped up the grain; as the buckets reached the top of the device, they tilted over and dropped the grain into the warehouse awaiting its arrival.
Buffalo’s access to both Lake Erie and the Erie Canal, and its strategic location almost equidistant from Chicago, New York, and Boston, led naturally to significant industrial development quite separate from the city’s strategic role in handling grain. A quarter of a century later, it was a major rival of Pittsburgh in steel and after 1900 would also play a role in the development of the automobile industry.44
In all the towns and cities that boomed once the canal opened, a striking improvement in real wages and living standards accompanied the brisk growth in manufacturing and the accompanying improvement in labor productivity. For the first time, luxury articles were available to people in the working class. Clothes and even furniture were no longer homemade items but something to be bought in the stores, often mimicking the high fashion of the wealthy. One historian describes the pattern of social change as the “democracy of expectant capitalists.”45 Among a great mass of economic data, the most remarkable indicator of the improvement in living standards and aspirations is that an estimated 32,000 Irish women and free blacks were working as domestic servants in middle-class homes in New York City in 1855.46
If we were to end the story of the Erie Canal with the miracle it contributed to the unification and economic development of the United States, we would have a story of daring and determination, of enormous achievement and innovation, and of a cornucopia of riches developing across a unified nation. But all that would be only part of the story. The untold part is in many ways as heroic, as audacious, and as historic as what we have already noted. To recount one without the other would deprive each of its fullest meaning for modern times.
While Buffalo was clearly the western terminus of the canal, and the opening to the lands beyond, Albany at the eastern end has always been more of a transshipment facility than a terminus. The canal’s true eastern limit was New York City, 150 miles to the south along the magnificent Hudson River. The story of the Erie Canal cannot come to an end without considering the profound importance of that connection. For it was not in the canal facilities at Albany that the Wedding of the Waters took place. Rather, the festivities culminated in the harbor of New York City, where Erie waters come down the Hudson to join the Atlantic Ocean.
| CHAPTER 20 |
THE GRANARY OF THE WORLD
In April 1824, in the course of a speech about the future of the Erie Canal and New York City, De Witt Clinton produced another of his eerily accurate forecasts. After predicting that the most productive regions of America would use the canal for transporting goods abroad or for consumption at home, he went on to describe the glowing outlook for the city: “The city will, in the course of time, become the granary of the world, the emporium of commerce, the seat of manufactures…the concentrating point of vast disposable and accumulating capital, which will stimulate, enliven, extend and reward the exertions of human labor and ingenuity…. And before the revolution of a century, the whole island of Manhattan, covered with inhabitants and replenished with a dense population, will constitute one vast city.”1
Yet Clinton’s glowing phrases and startling foresight were incomplete, too parochial in their vision. Clinton senses what might develop, but a crucial chapter in the future of the Erie Canal and of New York City is missing. What is it precisely that will trigger the extraordinary level and quality of economic and financial activity he foresees for one little island of merely twenty-three square miles? That the canal would have an influence on the future of New York City was beyond question. But the influence was reciprocal. New York City’s vast port and diversified economy would have a dynamic impact on the towns and cities along the route of the Erie Canal, on the increasing thousands of people sailing west on the packets for a new life, and, indeed, on the canal itself.
Even then the story is unfinished. Clinton’s remarkable foresight leaves out the most exciting part of the whole story. When he predicts that New York will become “the granary of the world,” he provides us with no more than a hint of the transforming events that lie ahead. Rather, he leaves us to take his forecast on faith, without elaboration or support.
The enduring success of the canal was not just in the marvel of a waterway linking Lake Erie and Buffalo with New York, nor was it only in the impressive economic development it motivated between Buffalo and lands to the west of Lake Erie. “In the course of time,” to borrow Clinton’s expression, the Erie Canal would turn out to be the first great bridge between the inexhaustible supplies of grain from the midwestern United States and the inexhaustible demand for food from Europe—and Britain in particular.
But how could that happen? Europe had fed itself since the beginning of time. Why should Europeans be seeking sources across the seas now, after all those centuries of self-sufficiency? And why does it matter?
Put these questions to the pioneers of the Industrial Revolution in eighteenth-century Britain—most of whom were early investors in the canal network of the Midlands that had become the new industrial heartland of Britain. Ask James Watt and Matthew Boulton, who together made a reality of the steam engine, or Joseph Priestley, the discoverer of oxygen, or the pioneer of factory production Josiah Wedgwood, or the innovator-of-all-trades Erasmus Darwin. Ask the Duke of Bridgewater, who, as we noted earlier, built a canal to connect a coal mine directly to Manchester. Or, most important of all, consult the great classical economists Adam Smith and David Ricardo, whose work involved the most careful study of the relations between food supplies, wage rates, and a nation’s prosperity.
As the driving force of nineteenth-century economic activity in Britain was transformed from agriculture to industry, and from animal power to steam power, management of food supplies for factory workers would develop into the critical variable of progress and the central focus of British politics and economic policy. Doing things the old way was no longer possible in an age of rapid-fire technological change. But in 1824 even De Witt Clinton could not foresee how vital the breadbasket of the midwest would be to the Industrial Revolution’s tidal wave of change. Or that the Erie Canal would be the nexus of the network that made the whole thing possible.
When Clinton delivered his dazzling picture of the future of New York City, the case for New York as the nation’s key city and port was by no means obvious. In 1664, after four English frigates sailed into the harbor and seized the community of New Amsterdam from the Dutch, the settlement was renamed in honor of the Duke of York. Although this event seems a far cry from the momentum of the Industrial Revolution in the 1800s, those four frigates freed New York from its limited role as an isolated Dutch trading enclave, transforming forever the entire character of the city’s economy.
