Investment in Fixed and Working Capital During Early Industrialization: Evidence From U.S. Manufacturing Firms

This paper utilizes a survey of the US manufacturing firms from 1832 to investigate the structure of manufacturing investment during early industrialization. Although several manufacturing industries, such as cotton textiles, depart from the pattern, most appear to have devoted the hulk of their investments to working capitaL This variation across industries in the composition of capital investmentsis indicative of a more general variation in factor intensities, and bears on the issues of why industries became concentrated in the regions they did, and the degrees to which they were adversely affected by the limited availability of long-term loans. Evidence that most manufacturing industries had quite modest investments in machinery and tools per unit of labor is also presented, serving to undercut the notion that the early period of industrialization was based on a proliferation of new, machinery-intensive technologies

The Heights of Americans in Three Centuries: Some Economic and Demographic Implications

This paper discusses the potential usefulness of anthropometric measurements in exploring the contributions of nutrition to American economic growth and demographic change. It argues that although the value of height-by-age data to economic historians will ultimately be resolved in the context of investigating specific issues, the early results of the NBER Projecton Long-term Trends in Nutrition, Labor Productivity, and Labor Welfare have been encouraging. Among the most significant findings to date are: (1)that by the time of the Revolution, Americans had attained a mean final height (and net nutritional status) that was very high, one that European populations did not generally reach until the twentieth century; (2) that the variation in stature across occupational classes was much less in the U.S. than in Europe; (3) that natives of the South have been taller than those from other regions of the U.S. since the middle of the eighteenth century, and that their absolute height increased during the antebellum period while mortality was declining there; and (4) that natives of large antebellum cities were much shorter than their country men born in rural areas or in small cities. The paper also examines, in a preliminary fashion, how a newly available data set bears on the hypothesis that a cycle in U.S. final heights began during the antebellum period. The theory might continue to be sustained, but a sample of U.S. Army recruits from 1850 to1855 does not seem to provide much support for it.

Was the Transition from the Artisanal Shop to the Non-Mechanized Fctry Assoc. w/Gains in Effcny?: Evdnc. from the U.S. Mnfctr. Censuses of 1820 & 1850

There are few more dramatic episodes in economic history than the displacement of the artisanal shop by the factory during the early stages of the Industrial Revolution as the predominant form of manufacturing organization. Despite the attention this development has received, however, the issues of why and how it occurred remain in dispute. This paper employs recently-collected samples of data on northeastern firms from the 1820 and 1850 Federal Census of Manufactures to investigate this transition in the U.S. context. It argues that the evidence is consistent with the hypothesis that even the early non-mechanized factories enjoyed an efficiency advantage over the traditional artisanal shop organization. The growth of average firm size in nearly all manufacturing industries between 1820 and 1850 indicates a systematic movement toward the factory organizational form. Some shops did survive, but they accounted for only modest shares of industry value added and become increasingly concentrated in areas where the extent of the market was less likely to justify firm expansion. Moreover, the estimation of production functions suggests that the non-mechanized industries were generally characterized by scale economies up to a threshold size similar to that of a small factory.

Manufacturing Where Agriculture Predominates: Evidence from the South and Midwest in 1860

We employ the 1860 Census of Manufactures to study rural antebellum manufacturing in the South and Midwest, and find that manufacturing output per capita was similar across regions in counties specialized in the same agricultural products. The southern deficit in manufactures per capita appears to have been largely attributable to the very low levels of output in counties specialized in cotton production. This implies that it was the South's capabilities for the highly profitable cotton production, not the existence of slavery per se, that was responsible for the region's limited industrial development -- at least in rural areas. The other major finding is that in both the South and the Midwest measured total factor productivity was significantly lower in counties specialized in wheat (the most seasonal of agricultural products as regards labor requirements). This is consistent with suggestions that agricultural districts where the predominant crops were highly seasonal in their requirements for labor were well suited to support manufacturing enterprise during the offpeak periods

Women, Children, and Industrialization in the Early Republic: Evidence from the Manufacturing Censuses

The first half of the nineteenth century was a critical juncture regarding the emergence of female participation in the market economy, the increase in the wage of females relative to that of adult males, and the evolution of large scale firms in both mechanized and non-mechanized industries. We present the first systematic and comprehensive description of these events as they evolved in the states of the Northeast to 1850. Our sources are primarily samples taken from three early censuses and reports of manufacturing, 1820, 1832, and 1850. Our principal findings are: (1) that women and children composed a large share (over 40% in 1832) of the entire manufacturing labor force during the initial period of industrialization in the U.S., but that this share began a secular decline as early as 1840; (2) that the wage of females (and boys) relative to that of adult males rose wherever large scale manufacturing establishments spread and that by 1850 this ratio had risen to almost 90% its long-term level; (3) that the labor force participation of young unmarried women in the industrial counties of the Northeast was, in 1832, high by late nineteenth century standards; and (4) that the employment of females and boys was closely associated with production processes used by large-scale establishments. Women and children had been a previously under-utilized and large segment of the potential labor force, and their harnessing by manufacturing was a critical factor in the industrialization of the Northeast.

Digging the Dirt at Public Expense: Governance in the Building of the Erie Canal and Other Public Works

The Erie Canal was a mammoth public works project undertaken largely because the scope of the investment was beyond what a private firm could manage during the early 19th century. As with most public works, there were ample opportunities for public officials to realize private gains from the effort, and many did. On the whole, however, the construction of the Erie Canal (and most other major public works projects of the era) appears to have been well conceived and executed; it not only paid off more than its costs through tolls, but also generated substantial welfare improvements for the residents of the state of New York in the form of producer and consumer surplus and a wide range of positive externalities. Although there was obviously some fraud and mismanagement, the public authorities carried out the work at costs relatively close to those projected at the point of authorization. In an effort to try to place this episode in a broader perspective, we compare the ratio of actual expenditures on construction relative to the estimated costs at the time of authorization for the Erie Canal, to those for a range of other public works over American history up to the present day. It is our contention that this measure, albeit quite narrow in focus, is informative about the quality of governance of public resources. We highlight how, by this standard, the governance of public resources during the canal era stands up well in comparison with what we have seen since. Indeed, the cost overrun ratios have risen sharply over the last half-century, coinciding with both a marked increase in the relative size of the government sector as well as sustained economic growth. These patterns suggest how important it is that better measures and other means of systematically studying how the prevalence and effects of corruption vary across different contexts be developed.

The Relative Productivity Hypothesis of Industrialization: The American Case, 1820-1850

The American Northeast industrialized rapidly from about 1820 to 1850, while the South remained agricultural. Industrialization in the Northeast was substantially powered during these decades by female and child labor, who comprised about 45% of the manufacturing work force in 1832. Wherever manufacturing spread in the Northeast, the wages of females and children relative to those of adult men increased greatly from levels in the agricultural sector which were previously quite low. Our hypothesis of early industrialization is that such development proceeds first in areas whose agriculture, for various reasons, puts a low value on females and children relative to adult men. The lower the "relative productivity" of females and children in the pre-industrial agricultural or traditional economy the earlier will manufacturing evolve, the proportionately greater will the relative wages for females and children increase, and the relatively more manufactured goods will the economy produce. A two-sector model which incorporates a difference in "relative productivity" between two economies is used to develop seven propositions relating to the process of early industrialization. Data from two early censuses of manufactures, 1832 and 1850, and other sources provide evidence for our hypothesis, demonstrating, for example, the low relative productivity of females and children in the Northeast agricultural sector, and the increase in relative wages for these laborers with industrialization. We conclude that factors with low relative productivity in agriculture were instrumental in the initial adoption of the factory system and of industrialization in general in the U.S., and we believe these results are applicable to contemporary phenomena in developing countries.