The Promise of Free Enterprise

There is in the genius of the people of this country a peculiar aptitude for mechanical improvements.… it would operate as a forcible reason for giving opportunities to the exercise of that species of talent by the propagation of manufactures.

Alexander Hamilton, 1791 ([84], 21)

The citizens of the young nation were anxious to take advantage of the economic freedom that their struggle for political independence had promised. As heirs to the concept of laissez-faire, originally propounded by French social philosophers and later transformed into the principle of freedom of trade by Adam Smith in The Wealth of Nations, they eagerly embraced the concept of individual enterprise as one of the rewards of a free society. The Americans found it easy to associate the pursuit of happiness with the acquisition of property, and thus the solemn oath of the Constitution established a unique economy in which the puritan ethic of individual enterprise and economy of means could generate the capital upon which an industrial state could be constructed. (A century later, Arnold Toynbee would confirm Adam Smith’s respect for barter as the connection between personal enterprise and a healthy economy: “If we once grant the principle of division of labor, then it follows that one man can live by finding out what other men want… ([87], 56))

Thus, competition between men, each seeking to serve the needs of others, emerged as the most logical means of mutual survival and established in the young American mind a practical as well as philosophic rationale for creating products that would vie with one another in an open market to satisfy consumer needs.

Adam Smith declared that it is in the best interest of a proud and responsible producer to provide those who have faith in him with products of the best quality, and that the consumer is most certain of being served well when he is intelligent and well-informed enough to select and value the better product. Thus, free enterprise may be described as dependent upon an equitable pact between a responsible manufacturer and a knowledgeable consumer. Experience has occasionally proved this to be a puristic theory because productive and promotional energy may, under the press of competition, be misdirected toward those elements of a product that emphasize its apparent quality at the expense of its real quality. And the public, sometimes naively willing to let appearances speak for quality, may prefer to reward promise over performance with its purchase. Nevertheless, the principle of free enterprise has played an indispensible role in the economic development of the United States, resulting in a high standard of living for its citizens.

In the early years of the American republic, many Europeans were convinced that its future would depend upon the development of an agrarian economy drawing upon the seemingly endless natural resources and virgin farmlands. They believed that this economy would be supported by thriving household industries in which collective industrialization would be of little value, agreeing in general with Adam Smith’s admonition that “were the Americans, either by combination or any other sort of violence, to stop the importation of European manufactures, and by thus giving a monopoly to such of their own countrymen as could manufacture the live goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase of their annual produce, and would obstruct instead of promoting the progress of their country.” ([81], 347)

Smith did not conceive that the vast territory of America would encourage regional specialization that would seek to balance agrarian with industrial growth. He noted that capital earned by manufacturers was used by them to buy uncultivated land for exploitation, and concluded that the advantage did not lie with the “artificer (who) is the servant of his customers, from whom he derives his subsistence” but rather with the “planter who cultivates his own land and derives his necessary subsistence from the labour of his own family (and) is really a master and independent of all the world.” ([81], 359) It was generally agreed that the development of American industry would be no threat to other countries because its inexhaustible resources would serve as an economic inducement far beyond that promised by its manufactures. The premise and perhaps the intent of the Europeans was that the Americans would be convinced that independence would be best ensured by sending raw materials abroad to be processed by their superiors and then resold to them at a higher price.

These observations were not without justification. The amount of land that was available for clearing, cultivation, and settling exceeded the demand and capacity of the population of the United States, so the promise of a quick profit from the wilderness provided an inducement beyond the risk of investing capital in manufactures. Moreover, with nine out of ten persons living in rural areas, the people were too scattered to provide the concentration of labor that is essential for industry. In addition, there was as yet a shortage of machines and of the technical knowledge to build and operate them.

The leaders of the young republic were therefore divided between those who wanted the United States to remain an edenic paradise and those who believed that economic stability and political independence would depend upon a balance of agrarian and industrial enterprise. John Adams was not at all confident in the ability of the Americans to manufacture. “I say,” he wrote to Benjamin Franklin in 1780, “that America will not make manufactures enough for her own consumption these thousand years.” ([52], 148) Thomas Jefferson was an outspoken champion of those who held to a pastoral ideal as the proper course for the new nation. In his Notes on Virginia (1785), he expressed the hope that America would become the home of an agrarian “Golden Age.” Jefferson warned that the chief danger to this ideal was the development of machinery, and advised his countrymen to return to their former balance of trade with European industry by exchanging their natural resources and farm products for finished manufactured products from abroad. Jefferson was convinced that the Europeans were obliged to manufacture and export because there was insufficient land for agriculture to sustain them. Therefore he proposed “for the general operations of manufacture, let our workshops remain in Europe,” noting that “it is better to carry provisions and materials to workmen there, than bring them to provisions and materials, and with them their manners and principles.” ([34], VIII, 405) Jefferson dreamed of a rural republic built upon the honest labor of the free farmer in the sun rather than the synthetic drudgery of the captive worker in the factory. In 1786, though he had returned from England to report in glowing terms on the progress of the British and his own passion for utilitarian improvements and labor-saving products, Jefferson was still convinced that the future of the United States must depend upon an agrarian economy supported by household manufactures. However, after the War of 1812 with the British, in which American industry played an important part, Jefferson was obliged to come full circle and acknowledge that, although he still preferred the rural life, he realized that “to be independent for the comforts of life, we must fabricate them ourselves,” and that “we must now place the manufacturer by the side of the agriculturalist.” ([32], 745)

The transformation of manufacturing in the United States from a scattered and erratic system of home manufactories into industries coincides to a remarkable degree with the end of the Revolution and the adoption of the Constitution. The Constitution’s unified approach to commerce and trade regulations created an atmosphere for equal enterprise that had been all but forgotten in the first scramble for economic advantage by the liberated but not yet joined colonies. At first each state attempted to set its own trade regulations, with the result that other nations (notably England) were able to play one colony against another and to set up trade rules of their own with no fear of concerted American retaliation. In addition, their individual issuance of paper money that proved to be irredeemable had made a shambles out of the fiscal policy of the colonies. However, now, under a common Constitution by which the colonies surrendered their sovereignty to become member states in a republic, a new sense of common economic adventure began to emerge. The passionate will for the success of the union made every citizen aware of his commitment to the whole, and in turn the government acknowledged its dependence upon the ingenuity and industry of its citizens.

Until the Revolution, political and economic circumstances in the colonies did not encourage collaborative industry. Each freeman looked to his own security by way of independent farming, home manufactures, or artisanal activity. However, the spirit that led to revolution and independence now began to stimulate investment in common enterprises such as manufacturing essential commodities in quantities larger than the sum of individual efforts could have produced. The accumulation of capital made it possible for shareholders to invest in the development or acquisition of machines for manufacture (by open or suspect means), to build water mills or steam engines to provide power, and to employ immigrants, itinerant laborers, children, and off-season farmers to operate the machines.

At this point the first signs of what would later be known as the American System of Manufactures begin to emerge. With the developing distinction between the personalized products of home industry and craftsmen and the depersonalized manufactures of industry, a widening gap appears between the managers and the laborers of industry. The managers, as representatives of shareholders who had invested their capital in the enterprise, were obligated to use labor and machines as elements in the manufacturing process; the workmen, on the other hand, were drawn together in order to demand the best possible return for their energy and skill and to guarantee their security. The earliest evidence of industrial corporations in America appeared in the form of societies of private citizens who had invested their capital in the development of manufactures in the interest of profit and patriotism. The Americans were not the first to form such organizations for the promotion of industry, but the concept was entirely in harmony with the search for economic freedom that underlined their conflict with and eventual separation from England.

As early as 1775 the pioneering venture of the United Company of Philadelphia for Promoting American Manufactures had captured the imagination of 20-year-old Tench Coxe, who purchased one share of stock in the company at 10 pounds sterling. Although the company did not succeed, Coxe was moved enough by the potential for such enterprise to write to Benjamin Franklin that American manufactures would result in “considerable immediate and immense future advantages.” Young Coxe, although he was an unpopular figure because of his early sympathies for the British, made himself the champion of a rudimentary American industry. He was convinced that, important as agriculture was, the political independence and survival of the United States depended upon a balanced economy in which manufacturing and agriculture would complement one another. Coxe’s pragmatism made him an important force in leading America away from an agrarian society toward a centralized government with economic as well as political power. According to Leo Marx, he was uniquely fitted to his role by a “rare empirical bent which led him to make predictions based chiefly upon economic data collected and interpreted by himself” and a “master publicist’s knack of casting aims in the idiom of the dominant ideology.” ([63], 151)

In May 1787, three days before the opening of the Constitutional Convention in Philadelphia, Coxe was invited by Benjamin Franklin to address the Society for Political Enquiries, an association of fifty leading Philadelphians who met every two weeks to discuss issues of topical interest. His speech, later published as an essay and distributed at the convention, proposed an economic system whereby the cultivators of the soil would provide sustenance not only for themselves and their families, but also for those engaged in manufactures and merchandising, with the surplus to be transported to the best foreign markets:

On one side we should see our manufacturers encouraging the tillers of the earth by the consumption and enjoyment of the fruits of their labours, and supplying them and the rest of their fellow citizens with … the necessaries and conveniences of life.… Commerce, on the other hand, attentive to general interests, would … range through foreign climates in search of those supplies, which the manufacturer could not furnish but at too high price, or which nature has not given us at home, in return for the surplus of those stores, that had been drawn from the ocean or produced by the earth. ([23], III, 24)

Later in 1787 Tench Coxe was invited by Benjamin Rush to express his views on an American system for balancing agriculture and manufacturing in an inaugural address before an assembly at the University of Pennsylvania of Philadelphians who were interested in organizing a society for the encouragement of manufactures and the useful arts. He called attention to the need to establish manufactures to serve internal markets and ensure a “certainty of supplies in the time of war.” Coxe was convinced that the scarcity and high price of labor could be overcome by the encouragement of immigration by those who were tired of conditions in their own country and would come to America in search of freedom and a livelihood through the use of “water-mills, wind-mills, fire [steam power], horses, and machines ingeniously contrived.” In response to objections based on the lack of machines in America, Coxe suggested euphemistically that some could be “borrowed” from other nations, and also that American inventors could be stimulated to develop others with offers of premiums to be paid in land. Coxe rejected the conventional concept of the incompatibility of organic and inorganic products, since both were subject to the ultimate laws of nature and the equally inevitable results of man’s effort to survive in a hostile environment. Leo Marx believes that the speeches of Coxe “prefigure the emergence of the machine as an American cultural symbol, that is, a token of meaning and value recognized by a large part of the population.” ([63], 163)

After Coxe’s address the assembly voted to establish the Pennsylvania Society for the Encouragement of Manufactures and the Useful Arts, which as one of its first ventures offered a $20 gold medal for the most useful engine operated by water, fire, or any other means that would reduce the labor of manufacturing cloth. In addition, the society attempted repeatedly (without success) to acquire the knowledge and the machines for spinning fiber and weaving cloth that had been developed in England and whose export was forbidden by the crown. Nevertheless, Coxe continued through 1789 his attempts to acquire, with Jefferson’s help, as he wrote to James Madison, “sketches and models from a country in the vicinity of France, which would very much assist the manufactures of the United States.”

A few months later Coxe again wrote to Madison about the great importance of machinery: “To procure and record the drawings and descriptions of machinery and apparatus in the arts and philosophical science appears to me a very great object. It is manifest that without depending inconveniently upon manual labor we may, by mechanism and a knowledge of the value of sensible objects and their effects upon each other, save great sums of money, raise our character as an intelligent nation, and increase the comforts of human life and the most pure and dignified enjoyments of the mind of man. No man has a higher confidence than I, in the talents of my countrymen and their ability to attain these things by their native strength of mind.” ([44], XIII, 112) In this letter Coxe managed to close the triangle of industrial enterprise that characterizes American industry. First he called attention to the promise of profit to be had by saving “great sums of money” in manufacture. Then, patriotically, he promised that the higher level of industry would raise our own “character as an intelligent nation.” And finally, he promised that such public service would “increase the comforts of human life.” In other words, Coxe saw beyond the simple concept of industry as an instrument for survival. He sensed that it was to become an example of the American ethic whereby personal gain and duty to country could best be achieved by serving public need.

George Washington, in his annual message to the Congress in 1790, observed that the country now had to look to developing independence in manufacturing, particularly insofar as the necessities of defense were concerned: “A free people ought not only to be armed, but disciplined; to which end, a uniform and well-digested plan is requisite; and their safety and interest require that they should promote such manufactures, as tend to render them independent of others for essential particularly for military supplies.” ([47], 2) Acting upon Washington’s recommendation, Congress asked Alexander Hamilton, then secretary of the treasury, to report to it the present state and future possibilities for the development of American manufactures. Hamilton, in his subsequent “Report on the Subject of Manufactures,” presented to the House of Representatives in 1791, outlined (with considerable help from Tench Coxe) the economic themes that have since served as a philosophic base for the American balance of agricultural and industrial enterprises. His report countered the prevalent resistance to the encouragement of manufactures; instead it demonstrated a precise knowledge of their indispensibility to the United States without dismissing the importance of agricultural products. Acknowledging the then-popular belief that the United States, with vast tracts of uninhabited territory, did not need to direct energy into the development of manufactures that did not promise the immediate rewards that conquering the wilderness did, Hamilton said that it was reasonable to believe that by specializing in the products of the wilderness and agriculture, the sparse population would be assured of both the goods needed for survival and a surplus that could be exchanged for essential commodities that other countries were in a better position to offer. Hamilton acknowledged that success in the wilderness and in agriculture depended upon dispersal of the population, but pointed out that machinery powered by steam and water was making it possible for industries to operate in or near the growing towns in America.

Although regulations imposed by the English on the Colonies before the Revolution had obstructed the growth of their trade with other countries, Hamilton expressed faith that the United States had not only the immediate capacity to meet their own needs but also a latent ability to generate profitable trade with other countries if they were assured of an international system of fair and free exchange. However, said Hamilton:

The prevalent [policy] has been regulated by an opposite spirit. The consequence of it is that the United States are, to a certain extent, in a situation of a country precluded from foreign commerce. They can indeed, without difficulty, obtain from abroad the manufactured supplies of which they are in want, but they experience numerous and very injurious impediments to the emission and vent of their own commodities.… Several countries … throw serious obstructions in the way of the principal staples of the United States.… The want of reciprocity… could not but expose them to a state of impoverishment compared with the opulence to which their political and natural advantages authorize them to aspire. ([84], 27)

Therefore, although Hamilton did not condemn the countries of Europe for looking to their own interest, he concluded that, if Europe would not take American products of the soil fairly, the states had no choice but to reduce their dependence upon others for manufactured products.

Since he did not feel that the interests of the proponents of agriculture were in conflict with those of industry, Hamilton proposed that agriculture would be well served by the encouragement of manufacturing. Even if labor were to be directed from the farm to the factory, reducing the amount of land being tilled, there would be an increased demand for farm products. Their value would be raised, and farmers would be encouraged to improve their methods of work in order to produce more. And, in return, a stimulus would be given to those industries serving the farmer to provide him with more efficient tools and machinery. Proof of this is found in the flood of agricultural machines that were invented and developed in the United States in the nineteenth century and in the preeminence of American “agribusiness” in the present century.

Hamilton’s report to the House questioned the wisdom of governmental interference in the free choice of opportunity of any one citizen even when it was acting in the best interest of all of the inhabitants of the country. Government’s objective, Hamilton proposed, should be to encourage independent initiative by making public funds available when private capital is scarce and by supporting the efforts of its citizens in trade with other countries by way of tariffs, bounties, and premiums. This expression of faith in individual enterprise as a necessary base for communal prosperity is fundamental to the American concept of free enterprise. Hamilton believed that every citizen had a personal right and, in a way, a public obligation to move freely to any location or occupation that held out a better opportunity for him. In this way a diversity of occupations would be encouraged and the spirit of free enterprise would be expanded by the proliferation of those occupations that would support the security and wealth of the nation.

In response to the shortage of enough labor to serve both agriculture and labor, Hamilton suggested that the labor force could be increased by employing persons during their leisure time or during those seasons when they were free of other work and by using women, children, and people who would otherwise be idle because of some physical or mental infirmity. He noted, for example, that in the nail and spike industry in the United States, after the most laborious operations have been performed by water wheels, “of the persons afterwards employed, a great proportion are boys, whose early habits of industry are of importance to the community, to the present support of their families, and to their own future comfort.” ([84], 80)

Further, Hamilton knew that men will even change nationality if they are offered obvious advantages elsewhere, and he therefore recommended that immigration be promoted by making opportunities to work in manufacturing in the United States attractive to the citizens of other countries. The wealth and industry of the country had already benefited enormously from the contributions of expatriates from Europe. Hamilton suggested that the disturbances in Europe were “inclining its citizens to emigration,” so that “the requisite workmen will be more easily acquired than at another time.” ([84], 61)

In closing his report to the House of Representatives, Alexander Hamilton reiterated the government’s commitment to promoting manufactures by stimulating invention by offering “pecuniary rewards according to the occasion and utility” of the contribution and through the acquisition of useful machinery and improvements to machinery from other countries. He noted the value of private organizations for the development of industry, and yet he urged the open support of government where needed because “In countries where there is great private wealth, much may be effected by the voluntary contributions of patriotic individuals, but in a community situated like that of the United States, the public purse must supply the deficiency of private resource.” ([84], 107)

Hamilton had explored the manufacturing potential of the United States from several angles: the capacity of the country to furnish appropriate new materials, the degree to which the nature of a manufacture admits of a substitute for manual labor in machines, the facility of execution, the extensiveness of uses to which the article can be applied, and its subservience to other interests (particularly those affecting the national defense). Though some manufacturers claimed that the government’s involvement in industry was showing preferential interest, most were pleased with Hamilton’s report. That the young government came out strongly in favor of private initiative in developing manufactures and offered federal action and monies if needed to support free enterprise did much to set American industry in motion and provided momentum that has carried it forward ever since.

By the time of the American Revolution the English had already put into service machinery invented by Arkwright, Cartwright, Hargreaves, Crompton, and others for the carding, spinning, and weaving of cotton—despite protests from labor, attacks by workers on the machines, and threats against the lives of the inventors. England recognized the economic value of such machinery and processes and passed an Act of Parliament in 1774 establishing strict regulations against their export to other countries. She also forbade knowledgeable artisans from emigrating to other countries. This did not dissuade the Americans from attempting to pry the secrets of textile manufacturing from England.

The credit for building and operating the first successful cotton mill in the United States is generally given to Samuel Slater, who had emigrated from England in 1789, when he was 22 years old, with papers showing that he had been apprenticed to a partner of Arkwright, the inventor of the first spinning machine. Slater was apparently enticed by an advertisement placed by the Pennsylvania Legislature that a reward of 100 pounds would be paid for a new carding mill and the establishment of a society to promote cotton manufactures. In the United States, Slater signed an agreement with Almy and Brown of Providence, Rhode Island, to build a series of Arkwright machines. However, since he had left London without drawings or models in order to avoid suspicion, Slater was obliged to draw each part of the machine on oak boards to be cut out and put together with dowels while a blacksmith made the metal parts according to his descriptions. After a series of frustrating attempts, a small manufactory was built in 1793, operated originally by human treadle power. Slater was “the first in America to achieve commercial profitability with Arkwright technology.” ([50], 84)

Thus, technology and industry came to the United States somewhat clandestinely, as an extension of the great sweep of the industrial revolution in Europe that was beginning to replace the medieval mysteries of the guild system with a more open system of evolution that stimulated rather than inhibited initiative. For centuries, it had been customary for monarchs to grant “privileges” for various trade activities to those who made discoveries that were useful to the state and profitable to the crown. In the United States, by the end of the eighteenth century, to profit from a new discovery had became a right rather than a royal privilege. Even before the Revolution the various colonies had laws conceived to encourage inventors by protecting their right to profit from their genius. As early as 1650 the courts of the Massachusetts colony had passed a law that there “should be no monopolies but of such new inventions as were profitable to the country and that for a short time only.” This concept of government supporting new inventions by guaranteeing the inventor a monopoly for a limited period in return for public disclosure of his idea was incorporated into the Constitution of the United States in article I, section 8: “The Congress shall have power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries.”

The U.S. government began operations in March 1789, and in January 1790 President Washington, addressing the second session of the First Congress, implored it to give “effectual encouragement … to the exertion of skill and genius at home.” In February the patent bill was presented to Congress and passed by the House and the Senate. It defined a patent as “any useful art, manufacture, engine, machine, or device, or any improvement thereon not before known or used.” (The patent act was concerned primarily with the scientific and technological uniqueness and the utility of a product, a process, or a composition; it was to be a half-century before the government would recognize its obligation to protect a unique appearance or design.) At first the term of protection was seven years, and was renewable for another seven. In 1861, the period of protection would be set at 17 years and declared not renewable. Congress vested original responsibility for patents in a board that included Secretary of State Thomas Jefferson, Secretary of War Henry Knox, and Attorney General Edmund Randolf, who were granted the power to issue patents “if they shall deem the invention or discovery sufficiently useful and important.” (Although Jefferson never took out a patent, he found great merit in limited monopolies as a means of encouraging the development of “many ingenious improvements … in the arts, and especially in the mechanical arts.” ([88], 462) Jefferson’s own inventions included an improvement in the mold board of a plow that was awarded a gold medal from the Agricultural Society of Paris. His zealous interest in the value of new things was an important factor in the initial acceptance and success of the American patent system.)

Three patents were granted in the first year. The first, signed by Washington and Jefferson among others, was granted to Samuel Hopkins of Vermont for a new apparatus and process for making potash and pearl ash. In 1800, ten years after the patent law was enacted, the number of American patents had grown to 306—about half the number of British patents. By 1820, American patents had surpassed the British 1,748 to 1,125, and by 1870 American patents granted were double the number of British ones. These figures are representative of the difference in the thrust toward technology between the mother country and her rebellious offspring, and serve to demonstrate the healthy stimulus provided by the Patent Law of the United States.

The opportunities and the promise of rewards for ingenuity and initiative released in the American what Michel Chevalier called “a mechanic in his soul” ([20], 285)—an instinct for contriving mechanical substitutes for manpower and for finding the quickest and easiest way of getting things done. This became such an obsession that the typical Yankee mechanic seemed driven to use the leisure he gained with one device to think up another one so that he would have more time to conceive still other improvements.

Oliver Evans (1755–1819), a man driven by the insatiable curiosity that plagues the creative spirit, was one of the first Americans to move into the free space of expanding science and technology. He typifies that rare breed of humans who are predestined—happily for society, but often tragically for themselves—to a life of unremitting and often unrewarding labor in search of a better world to come. Evans reflected this philosophy in his own hand in a copy of his book The Abortion of the Young Steam Engineer’s Guide that he willed to his son: “… he that studies and writes on the improvements of the arts and sciences labours to benefit generations yet unborn, for it is not probable that his contemporaries will pay any attention to him, especially those of his relations, friends and intimates; therefore improvements progress so slowly.” ([6], IV)

As a boy Evans was fascinated with the potential of deriving power from water and fire, and as an older man he was to devote himself to developing steam engines and applications for them. His first invention, however, was a machine to draw and bend wires for carding cotton and wool. Like Franklin before him, Evans refused to apply for legal protection because he believed that everyone should be able to benefit from his ideas without restriction. His professional career, nevertheless, was marked by conflict with others who sought to deprive him of the rewards of his creativity. At one point he even burned many of his designs and papers in frustration.

Oliver Evans made an important contribution to American industry when he demonstrated that ingenuity could be applied not only to the products of manufacture but to the process of manufacturing itself. In 1785 he built the first automatic factory in America, a grist mill that was capable of performing all of the functions of a flour mill with water power. Evans was granted exclusive privileges to the process for 14 years by the state of Pennsylvania. In order to promote his invention, he wrote and published The Young Mill-wright and Miller’s Guide, which passed through fifteen editions between 1795 and 1860 and is still used as a reference by millers.

In 1800 Evans built the “Columbian” high-pressure steam engine and put it to use for grinding plaster and cutting stone. In 1804, his dream of using steam for locomotion came true when he was contracted by the Philadelphia Board of Health to construct a steam-operated machine for dredging and cleaning docks. He built his contraption, 12 miles from the Delaware River, on wheels linked to the engine with a belt. After the machine had rolled itself to the water’s edge, the belt was shifted to a paddleboard to drive it across the water to its work site. Evans advertised his machine as the Oruckter Amphibolos (amphibious digger), and charged the public 25 cents each to view it in order to raise money to help pay the workers who had helped him build it. Although he never achieved his dream of building a locomotive, he quite accurately predicted its inevitability, not as an abstracted visionary but rather from the conviction and experience of a practical mechanic.

Despite Evan’s progress, it was apparent that the first major avenue of mechanical transportation in the United States would have to be the waterways. The steam engine was more easily carried on water than on land, and the basic principle of water propulsion seemed to be more readily accomplished by the then-available technical means. It is all but impossible to determine who, if anyone, should be given the fundamental credit for inventing the steamboat. The mechanical system had been established in England in 1780, and in that same year a Frenchman, the Marquis de Jouffroy, had successfully operated a steamboat. In 1785, Joseph Bramah of England patented a rotary engine with a screw propeller. Three years later, John Fitch (1743–1798) of Philadelphia, a clockmaker, silversmith, and inventor, conceived and built his first steamboat, a rather curious vessel that employed 12 vertical reciprocating paddles. A later version that ran on schedule between Philadelphia and Trenton on the Delaware River was the first successful experiment in steam navigation in Europe or America. Later, disappointed by lack of recognition and failure in other projects, Fitch committed suicide.

While Robert Livingston was in Paris in 1803 on assignment for President Jefferson to negotiate the purchase of the Louisiana Territory, he met the precocious American artist-inventor Robert Fulton (1765–1815) and managed to interest him in designing a steamboat. Fulton had been artistically inclined since childhood, when he had made pencils and taught himself to draw. He was already well known as a painter and inventor when he decided to go to London to paint with Benjamin West, an American expatriate artist who was a friend of his father. In England, Fulton had combined painting with design and had received patents for a cast-iron aqueduct, a method of raising canal boats, and the first power shovel for excavating canals. He had also written a treatise on a new system of canal navigation. In 1797 Fulton crossed the channel to take out French patents for some of his ideas, and was commissioned there to design a submarine. Although it was not the first submarine to be designed by an American, his Nautilus was considered successful. It was not permitted to approach near enough to British ships to hang bombs on them, but it scared them away.

Back in the United States, Fulton accepted a commission from Livingston to build a steamboat. In 1807 his boat, the Katherine of Clermont, was launched on the Hudson to win a competition to establish regular passenger service between New York City and Albany. Running on two side paddlewheels driven by an English Boulton and Watt engine, the Clermont was capable of making the voyage of 150 miles in 33 hours. Although a committee of the New York legislature declared in a hearing that the Clermont was in substance the same as the boat that was patented by John Fitch in 1791, history, with its capacity to put events in neat romantic order, generally credits Fulton as the father of American steam navigation. In 1811, Fulton, again with Livingston, designed and built in Pittsburgh the sternwheeler New Orleans, the first steamboat to ply the Ohio and Mississippi between Pittsburgh and New Orleans. His successful steamboats opened the inland waterways and provided a flow of goods that was at least equal in volume to transatlantic shipping.

In response to the expansive mood of the young republic, the wheels of American industry were beginning to gather momentum. Slater’s cotton mills increased in number, and they soon were powered by water wheels rather than human-driven treadmills. However, the potential of these mills was not realized immediately because the volume of cotton grown in the United States was barely enough to serve home manufactures. It was evident that industry could not grow until the sources of supply and the methods of manufacture, distribution, and consumption were in dynamic balance. What was needed most was an increase in the supply of cotton fiber. Although cotton was being grown, it was of little commercial value because of the difficulty of separating the seed from the fiber. It took 10 hours of labor to “clean” 3 pounds of seed from a pound of fiber.

Eli Whitney (1765–1825) had recently graduated from Yale University and was serving as a tutor to a private family in Georgia when he learned about the cotton-cleaning problem and was stimulated to try his own hand at solving it. In a flash of insight, he conceived and built a small working model of a machine to do the job. With a full-size water-powered cotton gin, one man could clean 300–1,000 pounds of cotton a day. This invention closed the circle of operations necessary to make the cotton industry roll. Within two years, cotton production increased eightfold, and a quarter of a century later America was not only meeting her own burgeoning demands but also supplying three-fourths of the cotton used in England.

Before Whitney could patent his invention, its secret was discovered and quickly pressed into service without permission. Other than the relatively small payments made to him in conscience by the states of North and South Carolina, he earned nothing from his invention. He complained of his sad experience in a letter to his fellow inventor Robert Fulton, and returned to New Hampshire determined to turn his inventive genius to other enterprises that would prove more rewarding.

Eli Whitney’s brilliant breakthrough to a solution of the problem that had held down the commercial production of cotton in America illustrates that a perceptive outsider may often see a solution more clearly than those on the inside. The “sophisticated naivete” of a designer may capture an abstraction or glimpse an order that escapes a person whose proximity to the problem has obscured his vision. Whitney’s cotton gin brought prosperity back to southern plantations, and with it the revival of slavery. And it gave rise to the manufacture of cotton cloth in the North.

Even so, it would be misleading to conclude that home manufactures disappeared overnight. In 1810 most of the cotton and wool fabric in the United States was still being manufactured in the home for personal use and private sale. Home manufactures—for the rural family a profitable source of income that could be gained with little or no loss of farm time—continued to increase for a while.

Standardization was apparently applied first by the French Artillery in 1765 when the various parts of gun carriages were organized so that any part could be replaced by another in any carriage in its class. Interchangeability had also been used by the British in the manufacture of pulley blocks for the Navy. The first American knowledge of part standardization came in 1785 when Thomas Jefferson wrote from France of having observed it in the construction of muskets in the manufactory of LeBlanc. Jefferson wrote of being given the parts of 50 musket locks: “I put several together myself, taking pieces at hazard as they came to hand, and they fitted in the most perfect manner.” His efforts to bring LeBlanc to the United States failed because of the threat the new method posed to those using traditional methods of building weaponry.

A few years later, however, the principle of standardization and interchangeability bore fruit when, in 1798, Eli Whitney proposed to Oliver Wolcott, secretary of the treasury under John Adams, that he be contracted to manufacture 10,000–15,000 stands of arms (consisting of musket, bayonet, ramrod, wiper, and screwdriver). Whitney promised to deliver them within two years by manufacturing them on the principle of interchangeability. “I am persuaded,” he wrote to Wolcott, “that machinery moved by water, adapted to this business, would greatly diminish the labor and greatly facilitate the manufacture of this article. Machines for forging, rolling, floating, boring, grinding, polishing, etc., may all be made use of to advantage.” (205, V, 117) Although Whitney had no factory or machinery, his reputation as the inventor of the cotton gin gained him $30,000 in bonds from New Haven friends and $10,000 from a New Haven bank to win a government contract of $134,000. With these resources he set up a mill at what is now called Whitneyville, Connecticut, and began operation in 1800 with 60 employees. Before Whitney could begin production he had to redesign the musket, anticipate and plan every stage in its manufacture, devise appropriate patterns and processes for each part, and either acquire appropriate machinery for each operation or design and build it where none was available. Like others before him, Whitney found it necessary to invent machines that would ensure the accuracy that was needed. His contribution was the milling machine, just as before him (in England) John Wilkinson’s boring machine had made Watt’s steam engine efficient and Henry Maudsley’s machine lathe had made the manufacture of other accurate machines possible.

Although Whitney did not meet the deadline of his original contract (it took him nearly 8 years to work the “bugs” out of his system), the order was completed and the interchangeability of his musket components was demonstrated successfully in Washington. As a result he was awarded a new contract in 1811, this time for 15,000 stands, and he managed to fill that order within 2 years. In the heat of the war of 1812, it became evident that the greatest impetus for the transformation of science to technology would come from military needs.

Eli Whitney’s musket factory displayed the basic characteristics of what Henry Clay first called the American System of Manufactures—the method by which a successful industry could be built “from the top down” by a group of citizens who shared a perceptive and even inspired sense of public needs and desires and were willing to combine their personal capital and resources in a joint venture that would serve the public while returning a fair profit to them for their initiative. It demonstrated that intelligent planning in combination with empirical experience could be used to design and build under one roof a complete facility with a common source of power; to acquire or develop specialized machines and to link them into a system; to attract, train, and compensate the necessary labor force; to manufacture a product or a range of products in sufficient quantities to meet anticipated or generated demand; and to amortize the costs of building, manufacturing, and marketing by prorating them across the sales of the products. The American System of Manufactures became (even though Clay used the term originally in reference to a system of protective tariffs that would encourage internal improvements) what John Kouwenhoven called “as indigenous to the United States as the husking bee.” ([21], 40)

The natural corollary to a successful system of manufactures was the development of a dependable system of transportation. George Washington had said in 1785 that improved transportation was necessary to bind the people of the United States together. Alexander Hamilton’s interest in transportation was motivated by economics rather than politics. He believed that improvements would unite the remote and the populous parts of the country in a common market, and that the introduction of rival commodities would break down monopolies in areas where they had existed.

The first 50 years of freedom had transformed the new republic from a group of divided colonies into a virile young industrial competitor on all fronts. While the concept of technology as the adaptation of scientific knowledge to useful purpose was as yet unrefined (the word technology was coined in 1829 by Jacob Bigelow of Harvard), the citizens of the United States were quickly putting their dreams of a pastoral America into balance with the economic realities of industry. Technological centralization was replacing the vertical structure of craft technology (in which the artisan participated in every stage of his product’s evolution) with a horizontal stratification (in which one layer of employees is charged with planning a product, another with its manufacture, and a third with its merchandising). It was at this point that the emergence of the industrial designer as the catalyst between these three layers and the consumer became inevitable.