FREE ESSAY ON GROWTH OF NYSE

GROWTH OF NYSE

Growth of NYS Business 
April 17, 1996 
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. 
Bibliography 
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. 
Kass, Alvin. Politics in New York State, 1800 -1830. Syracuse: 
Syracuse UP, 1965. 
North, Douglas C. The Economic Growth of the United States, 1790-1860. 
New York: Norton, 1966. 
Spann, Edward K. The New Metropolis: New York City, 1840-1857. New 
York: Columbia UP, 1981.