Political Economics Prof

Tag: American History

New Jersey Artillery Explosives Production in World War I

Written by Andrea Dragon, Ph.D. Dr. Dragon investigates and writes about New Jersey’s industrial history. Professor Dragon will be teaching a continuing education course on “New Jersey’s Explosives History” at Rutgers – New Brunswick on October 8, 2025. See details at the end of this essay.

1914:  World War I Breaks Out

Russia started to modernize its army in 1913, with substantial French financial and weapons support. The beginning of a five-year plan, one of the main goals was to expand artillery to catch up with Germany. But war broke out.

After the first four months of the war, all combatants realized they were in for a long war with deadly modern weapons. Every country’s strategy of a quick victory through offensive warfare failed. Germany did not defeat France and England in the west, and the Russian offensive against Germany in the east ended in disaster. The result was four years of trench warfare in the west and three years of large-scale but inconclusive warfare in the east. Russia stayed in the war only because of imports of weapons, especially through large orders in the U.S.

Russia, like all combatants in World War I, was not prepared for a long war. Russia’s stockpile of shells was inadequate for the high rates of fire. The Russian army used up most of its inventory of shells in the first four months of the war. Russia did not have the production capacity to resupply shells for its large army.

Financing Russia’s Need for Artillery Shells and Explosives: First England and then J. P. Morgan and American Loans

Russia needed foreign loans because it couldn’t produce the quantity of war materiel needed to engage in modern warfare. When the war began in the late summer of 1914, Russia had a large standing army of over one million soldiers and through conscription and reserves Czar Nicholas II had the ability to draft and call up millions more for the army. What Czar Nicholas didn’t have was the industrial capability to manufacture artillery, artillery shells and ammunitions in the quantities necessary to turn his large army into a modern fighting force.

The Czar’s cousin, King George V of England, and his parliament, were willing to spend whatever it took to keep the Czar’s army fighting on Germany’s eastern borders because every German soldier sent east to fight the Russians meant one less soldier to fight British soldiers in the trenches of France and Belgium.

In the early months of the war, Britain loaned Russia money to buy armaments on the world market, but Britain attached conditions to the loans (buying in England?). Although the munitions themselves would be made to Russian specifications, the contracting for their manufacture would be handled by the British.

Russia chafed under these conditions and wanted a free hand to choose the manufacturers, delivery times, and most important of all, how and when the contracts would be paid. Russia tried to go around Britain and seek loans directly from bankers in the neutral United States believing those conditions would be less onerous than the British ones.

Obtaining U.S. Financing



J.P. Morgan was an investment bank. It did not have the financial assets of a large commercial bank. Morgan syndicated loans through wealthy corporate and individual clients and other banks. It made its money from commissions.

A compromise of sorts was reached in the fall of 1914 when Chancellor of the Exchequer and later Minister of Munitions David Lloyd George asked J. P. Morgan, Jr. who was heading up his father’s banking house, to loan Russia $12,000,000 (about $300 million in today’s dollars) to buy weapons and ordnance. A few months later, Morgan responded to additional requests by beginning a long process of bundling a staggering $500,000,000 worth of loans from his bank and from other American banks.

Only a few people in the United States outside of the government knew that seventy-five percent of the Morgan-brokered money was designated to be funneled through obscure channels to Russia to buy munitions from American ordnance companies. Although these direct loans from privately owned banks to governments at war with Germany were not illegal because they did not violate America’s official policy of neutrality, they were the subject of fierce debate among members of President Wilson’s cabinet. The new loans granted Russian officials the ability to act without British oversight enabling them to add layers of regulations to manufacturing contracts by inserting a boggling array of parties, terms, penalties and conditions. The U.S. government refused to make or guarantee loans because of Wilson’s policy of neutrality. America was still strongly isolationist, so any government loans would probably be politically unpopular. And Wilson was facing reelection in 1916.

On September 22, 1915, representatives of the Russian and British government, with J.P. Morgan, Jr. acting as purchasing agent, signed a contract with New Jersey’s Union Powder Company for the manufacture of several million rounds of both high explosive and shrapnel shells for the Russian version of the French 75mm (76.2mm due to Russia’s unique system of measurement) field artillery gun. These were the first Allied shells made in America.

New Jersey Artillery Explosives Production and Shipping for Russia

Russia contracted with American companies, mostly in New Jersey, to produce shells and explosives as early as 1915.

”Soon to be erected on the north side of the Raritan River between the towns of Fords and Metuchen will be the world’s largest munitions factory.”

Daily Home News, New Brunswick, New Jersey, July 17, 1915.

The newspaper didn’t name the Raritan River factory, but it was the Nixon Nitration Works and its sole customer was the Russian Imperial Army. It was owned by New Jersey explosives pioneer Lewis Nixon.

Lewis Nixon was the top graduate of his 1882 U.S. Naval Academy class. After graduating, he pursued graduate work in naval architecture at the Royal Naval College in England where the future King George V was his classmate. After finishing his studies in England, Nixon moved to Russia where he spent a few years building torpedo boats for the Czar’s navy before returning to the U.S. and managing shipyards in Philadelphia and Elizabeth, New Jersey. In 1897, he supervised the building of the U.S. Navy’s first commissioned submarine.

Despite his success in ship building, Nixon lost interest in naval architecture and decided to switch to manufacturing the explosive propellant nitrocellulose, commonly known as smokeless powder. Even though he knew the basics of smokeless powder manufacture (soaking cotton in nitric and sulfuric acid with the aid of a solvent) Nixon couldn’t just start manufacturing because unlike gunpowder, smokeless powder was proprietary and he risked being sued for patent infringement if he proceeded without a obtaining a license from a patent holder. He contacted a Naval Academy classmate, John Baptiste Bernadou, who was conducting research on smokeless powder at the Naval Torpedo Station in Newport, Rhode Island. Like Nixon, Bernadou had traveled to Russia and spoke the language which came in handy because he was also the naval station’s official translator of international research articles including those written by the Russian chemist Mendeleev, the same Mendeleev who devised the periodic table. In 1897, Bernadou and a colleague, George Converse, received an American patent for smokeless powder that was very similar to the one Mendeleev had patented years earlier. (For the story of the development of smokeless powder, see my post The Maxim’s Machine Gun and Smokeless Powder.)

After buying a license from Bernadou, Nixon began manufacturing smokeless powder in the Raritan River town of Sayerville. Unsurprisingly, right away Nixon received orders from the U.S. Navy and from several European armies and by 1902 his factory was producing 6,000 pounds of power a day.

In 1904 Nixon sold his business to the explosives giant DuPont and returned to naval architecture. But the advent of war revived his interest in smokeless power and utilizing his knowledge of Russian, and his royal contacts in Britain, he obtained a contract to supply Russia with 1,000,000 pounds of smokeless powder in 1915. In his new company (the world’s largest munitions factory referred to in the above quote) which was spread out over twelve square miles along the Raritan River, hundreds of powder men and women and their Russian supervisors produced 75,000 pounds of smokeless powder a day, producing over 200,000,000 pounds by the end of the war.

Nixon wasn’t the only New Jersey powder man who made explosives for the Russians in WWI, but he was among the largest. One thing all manufacturers had in common was all received payment for the powder and shells they produced from the money Russia had borrowed via a bewilderingly complex system of loans.

Union Powder company was owned by another New Jersey explosives pioneer, T.A. Gillespie, who had no experience making munitions but as owner of an important New York civil engineering firm he had experience getting government contracts.   His company was one of several New Jersey shell-loading subcontractors doing business with the lead contractor, Canadian Car and Foundry, a Montreal-based manufacturer of heavy railroad equipment. In October, 1914, just few weeks after the war began, Canadian Car had received a contract from the British government to manufacture 5,000,000 shells for Russia even though the company had no experience making munitions. Early in 1915, Canadian Car purchased fifty acres of New Jersey swamp land near the town of Lyndhurst and began building what was billed as the world’s largest shell-loading facility, “Kingsland,” where hundreds of employees working under Russian supervision would load smokeless powder propellant that had been made by Nixon and other powder men plus shrapnel and high explosives into shell bodies shipped to Kingsland via railroad.

Only about half of the shells specified in the contract had been delivered in January of 1917 when a devastating explosion nearly destroyed the facility, but Canadian Car partially rebuilt and loading operations limped along at a reduced pace until August of that year when the political situation in Russia began to change following Lenin’s return from exile.   Because the Russian Imperial Army was Kingsland’s only customer, the facility’s future depended on whether the new government in Petrograd was going to continue to fight on, or get out of the war altogether. Sensing which way the wind was blowing, Canadian Car closed down their Russian shell-loading operation in Kingsland a few weeks later.

The three largest shell-loading plants in the United States were in New Jersey.

The United States Enters the War

Russia left the war late in late 1917 because of the Russian Revolution. The new Bolshevik (Communist) government defaulted on Imperial Russia’s obligations to pay for the munitions it had received from American suppliers and subcontractors. Fortunately for New Jersey explosives manufacturers, the United States entered the war in April, 1917.

After the U.S. declared war, the New Jersey explosives industry shifted into a much higher gear. For example, an all-female crew working at DuPont’s explosives plant in Carney Point, New Jersey, produced 1,000,000 pounds of powder a day.

The United States army had little artillery. The French “rented” artillery to the U.S. Army who paid the rent in picric acid (TNP) filled shells. The French supplied the hardware and the U.S. supplied the manpower and the explosive shells. This was General Pershing’s deal. New Jersey workers made the picric acid, loaded it into shells, then shipped the shells to Europe via South Amboy and Jersey City.

For security reasons, shell production figures were never published and exact numbers remain elusive. A reasonable guess is that between four and five million high-explosive shells were manufactured at all the shell-loading plants in the U.S. between April 1917 and November 1918.

In the summer of 1918, the U.S. government contracted with Gillespie to build a giant shell-loading facility, one of the largest in the world.

How many of that number Gillespie’s Morgan plant produced may never be known because on October 4, 1918, the Gillespie plant was destroyed by an explosion that killed over 100 workers, many of them women and teenage girls. The explosion destroyed twelve million pounds of high explosives.

No evidence of sabotage was ever found.

Conclusions

This is a good example of two key aspects of World War I.

First, the United States as the world’s largest and most diverse industrial power could provide Russia and later France with war materiel they could not produce themselves in sufficient quantity.

Second, England, France and Russia had resources beyond what they could domestically produce or provide. In this example, access to artillery shells from Canada and the United States. In addition, England and France could call upon substantial numbers of troops from colonies and Dominion countries (Canada, Australia, New Zealand and South Africa).

New Jersey’s Explosive History

Wednesdays, Oct. 8 – Nov. 5 (5 weeks) 10:30 a.m. – 11:30 a.m.

Location: in–person in New Brunswick Member: $40 / Non–Member: $60

The explosives industry in New Jersey began in the late 19th century when a handful of entrepreneurs built an industry and a “powder town” near the Raritan River with the help of a few eccentrics including a crook or two, and former New Jersey resident sharp–shooter Annie Oakley. Decades later during WWI, the New Jersey explosive industry had expanded to other sites in the state and had grown so large it was able to supply half of the explosives used by all the Allies. Although their story is largely forgotten, thousands of brave New Jersey men, women and teenage girls made millions of tons of explosives and loaded them into shells destined for the battlefields of Europe and over a hundred of them lost their lives in terrible explosions. (course code NBV38)

Instructor: Andrea Dragon

========================================================

For related posts by Dr. Dragon, see

The Maxim’s Machine Gun and Smokeless Powder

KELP IS ON THE WAY: How American Kelp Helped Save the English Explosives Industry in World War I

July 4, 2024
The Maxim Machine Gun and Smokeless Powder

Written by Andrea Dragon, Ph.D. Dr. Dragon investigates and writes about New Jersey’s industrial history. Professor Dragon will be teaching a continuing education course on “New Jersey’s Explosive History” at Rutgers – New Brunswick, starting on October 8, 2025. For details, see the course description at the end of this essay.

Hiram Maxim and his machine gun

Hiram and Hudson Maxim: Inventors of the Machine Gun and Developers of Smokeless Powder

New Jersey’s eccentrically brilliant brothers, Hudson Maxim (1853-1927) and his cantankerous, womanizing older brother Hiram Stevens Maxim (1840-1916) were both born into a poor, rural Maine family. Hudson claimed receiving his first shoes when he was sixteen. He rarely attended school and was self-taught. Astonishingly, Hudson Maxim’s earliest claim to fame was as the author of a popular “teach yourself” book on penmanship. He also possessed a breathtakingly large ego, once bragging that he could write an article on almost any subject in the world without doing any research.

Both brothers were prolific inventors; Hiram received 200 patents in his lifetime, the most significant was for the machine gun. Hudson was also a serial inventor and tinkerer who received 60 patents, including one for smokeless powder.

In 1881, when he was twenty-eight, Hudson sailed to London to help his brother Hiram establish an English branch of Hiram’s company, U.S. Electric Lighting Company headquartered in New York. Hiram was not only the company’s founder, but he was also the chief engineer who supervised the installation of the first electric lights in a New York office building. Hiram also claimed to be the original inventor of the light bulb, saying Thomas Edison knew more about patent law than electricity. When the brothers sailed for London, Hiram Maxim had a home in Fanwood, New Jersey, where he lived with his wife and three children. He may have had business reasons for travelling to England, but in addition he wanted to escape the public uproar over his bigamous marriage to his mistress who was traveling with him. He had another reason to beat it out of New Jersey – he may have fathered a child by a 15-year-old girl who claimed he had bigamously married her.

The Maxim Machine Gun

Hiram may have begun developing the machine gun while living in New Jersey, but after moving to England and with financial backing from Albert Vickers, Hiram was able to build a workshop where he refined his machine gun, receiving a patent in 1883 then establishing the Maxim Gun Company in 1884. It wasn’t until 1889 that Maxim was able to sell a manufacturing license to the British Army.

In 1888, Maxim hit the road selling his gun. One of his early targets was the German army but negotiating a license with arms manufacturers there was a cumbersome process involving several entities that already had interests in his British operation as well. He finally sold a seven-year license to his machine gun to the German company Ludwig Lowe in1892. The Lowe Company joined with Mauser in 1896 to form Deutsche Waffen-und Munitionsfabriken AG and the Maxim license was re-negotiated.

Long before the war, the Vickers company had become a major shareholder in the Maxim Machine Gun Company and in 1897 Hiram Maxim sold all his remaining shares to Vickers.

Hudson Maxim

Smokeless Powder

The Maxim brothers knew Hiram’s machine gun could revolutionize the way artillery was used in warfare, but until a way could be found to reduce the smoke it produced, promoting the gun was challenging. While the Maxim gun could fire up to 600 rounds per minute, the smoke generated by that many gunpowder-fired rounds produced a black cloud so large and so dense the gun’s eye-watering, coughing three-man crew couldn’t see the target, but the enemy could easily locate the position of the gun.

Of all the late 19^th century American and European explosives pioneers eagerly promoting smokeless powder as a replacement for black gunpowder, Hiram and Hudson Maxim are among the most intriguing. Although their contributions to the development and commercialization of smokeless powder are largely forgotten, the Maxim brothers were important early participants and merit greater recognition.

Some kind of smokeless powder was needed to make the machine gun more commercially viable. Fortunately, the Maxims had invented one, or rather each brother had invented one. Hudson claimed he had developed a type of smokeless powder before 1881 when he left for England, while his older brother Hiram claimed he invented smokeless powder long before his brother did. But neither brother invented smokeless powder. The real inventor of nitrocellulose, what Americans call smokeless powder, was a Swiss chemistry professor named Christian Schonbein who was working at his home in 1845 in Basel, Switzerland, when he accidently spilled nitric acid onto his kitchen table. Fearful of being scolded by his wife who didn’t approve of his kitchen-based experiments, Schonbein grabbed the nearest cloth, his wife’s cotton apron, used it to wipe up the spill then hung the apron over the oven door to dry. After it was dry, a “flash,” or a “spark” (depending on who’s telling the story) occurred igniting the apron that instantly burned up without producing any smoke.

Whether or not that story is true, Schonbein recognized that soaking cotton (cellulose) in nitric acid created a new molecule, nitrocellulose, that burns without smoke and could replace smoky black power in ammunition. He attempted to commercialize his discovery by selling a manufacturing license to a British company, but shortly afterward an explosion leveled the English factory killing eighteen workers. Schonbein returned to teaching chemistry.

As word of Schonbein’s discovery spread, other European chemically-inclined entrepreneurs filed nitrocellulose patents. Among them were Paul Vielle of France in 1884, Dimitri Mendeleev (of periodical table fame) of Russia in 1892, and Alfred Nobel (the dynamite king) of Sweden in 1887. Each man established companies with production facilities, claimed their ideas had been stolen by at least one of the others, and devoted much time and energy suing each other for patent infringement.

European armies were becoming increasingly interested in smokeless powder and in 1889, coinciding with the British army’s purchase of the Maxim gun, the British Explosives Committee began the process of selecting a nitrocellulose-based powder to replace the black gunpowder used to propel shells and bullets from guns large and small. The powder selected would become the official military powder of Great Britain to the exclusion of all others. Because all inventors were invited to submit samples to be tested, the American Hiram Maxim submitted a sample of his smokeless powder, and so did the Swede Alfred Nobel.

Neither the American nor the Swedish sample was selected. The winner was a type of nitrocellulose called “cordite” submitted by British citizens Frederick Abel and James Dewar. As members of the British Explosives Committee, they had examined all the submissions and read all the accompanying documentation before submitting their sample. The inventors who weren’t selected claimed the selection process was rigged to favor the British citizens. Both Hiram Maxim and Alfred Nobel sued but lost in British courts and cordite became the official propellant for all artillery in the British Army.

Twenty-five years later during WWI, vast quantities of it were used to fire bullets from the Vickers-Maxim machine gun, which may have been responsible for as many casualties as cordite-fired shells from field artillery pieces. Because the British army was unable to produce the tremendous quantities of cordite needed to fire all that ammunition, it contracted with New Jersey explosives manufacturers to make millions of tons of cordite and load it into shells which were shipped to Europe via South Amboy and Jersey City.

The Later Years of the Maxim Brothers

Wealthy from the proceeds of the sale of his machine gun company, Hiram Maxim became a British citizen and settled into a comfortable life in England but became estranged from his brother Hudson, who had returned to New Jersey. Hiram was knighted in 1902 and the French awarded him the Legion of Honor. In his final years he wrote about philosophy and Christianity. In 1946, Hollywood released a modestly successful feature film about him, “So Goes My Love” based on the memoir A Genius in the Family written by his son, Hiram Percy Maxim, inventor of the gangster-friendly handgun silencer. The film, starring Don Ameche and Myrna Loy, is said to be a comedy.

In 1890, Hudson Maxim established a smokeless powder factory in central New Jersey in a newly created town called “Maxim.” He hoped to make a powder that would become the official powder of the U.S. army in the same way that cordite had become the official powder of the British Army. Although he sold Maxim powder to the army, it never became an official powder. Hudson Maxim retired to his mansion on Lake Hopatcong where he wrote The Science of Poetry and the Philosophy of Language, publishing it in 1910.

COMMENT. About one million machine guns were produced in World War One. England was able to greatly increase its cordite production after a chemist developed a new and more efficient way to produce it. The chemist later became the first president of Israel.

After the United States entered the war, large quantities of another type of explosive was produced for French guns in exchange for France “loaning” artillery to the American army.

Dr. Dragon is teaching a course at Rutgers University, New Brunswick, New Jersey:

NNew Jersey’s Explosive History

Wednesdays, Oct. 8 – Nov. 5 (5 weeks) 10:30 a.m. – 11:30 a.m.

Location: in–person in New Brunswick Member: $40 / Non–Member: $60

The explosives industry in New Jersey began in the late 19th century when a handful of entrepreneurs built an industry and a “powder town” near the Raritan River with the help of a few eccentrics including a crook or two, and former New Jersey resident sharp–shooter Annie Oakley. Decades later during WWI, the New Jersey explosive industry had expanded to other sites in the state and had grown so large it was able to supply half of the explosives used by all the Allies. Although their story is largely forgotten, thousands of brave New Jersey men, women and teenage girls made millions of tons of explosives and loaded them into shells destined for the battlefields of Europe and over a hundred of them lost their lives in terrible explosions. (course code NBV38)

Instructor: Andrea Dragon

Osher Lifelong Learning Institute at Rutgers University

=====================================================================

Related posts by Dr. Dragon:

KELP IS ON THE WAY: How American Kelp Helped Save the English Explosives Industry in World War I

New Jersey Artillery Explosives Production in World War I

For a related article on Hiram Maxim, see

https://digitalcommons.library.umaine.edu/cgi/viewcontent.cgi?article=1243&context=mainehistoryjournal

For the beginnings of World War I, its consequences, and a bibliography, see

The Beginning of the Twentieth Century: The Start of World War I.

Bismarck and the Origins of World War I

Europe on the Brink of World War I

Also see other related posts:

Wealth and Power in Pre-World War I Europe

The Austro-Hungarian Empire Before World War I

It is argued in the following post that the First World War was a major cause of much of the violence and disruptions of the 20th century.

The Immediate and Long-Run Historical Consequences of World War I

For a list of all posts, with links, on this blog, see List of Posts by Topic

June 2, 2024
Religion and American Politics: A Historic Perspective

Carrie Nation – Prohibitionist

RELIGION IN AMERICA

There is an interesting dynamic in
the history of Protestantism in America. As different
Protestant churches became the “established” or mainstream churches, many Americans turn away to form and join more evangelical or Pentecostal churches and
sects. This began in colonial America. Following the spectacular success of itinerant evangelical preacher George Whitefield in 1740 (the first Great Awakening), the evangelical New Light movement and independent itinerant preachers swept America. They challenged the established (tax supported) churches with emotional appeals for salvation. Although the fervor died down in the 1750s, it never disappeared.

The large and sudden popularity
of Baptists and Methodists in the first half of the 19^th century was a revival of the reaction to the less fervent Puritan (Congregational) and Episcopal
churches. As Methodist and some Baptists
groups became less evangelical and more “mainstream,” there were numerous
breakaways to found evangelical, enthusiastic and Pentecostal churches.

America has a long history of itinerant preachers and camp meetings. Enthusiastic preaching, as opposed to fixed
liturgies and long, rational sermons, can now reach national and international audiences
through mass media.

Competition in the religious
marketplace, the lack of one dominant religious group or “established” church after the Revolution, is one reason for the enduring important role that religion
plays in American life. America is the exception to the general tendency that as Christian
countries experience rising income, religious participation and influence declines. It is only recently, as many evangelical groups ally themselves with far-right political positions and politicians, that religious participation may be declining.

RELIGION AND
POLITICS

Religion, and religious-based
morality, has played an important role in American politics. Bernard Bailyn, in his classic Ideological
Origins of the American Revolution, documents the increasingly radical
anti-British sermons of Puritan ministers.
Revivals, “Great Awakenings,” and evangelical Protestantism have been
part of the American landscape as far back as the wildly popular colonial
preaching of the itinerant George Whitefield.
The “Great Awakening” revivalist crusades of Charles Grandison Finney in
the 1820s and 1830s along the Erie
Canal, whose book on how to
organize a religious crusade influenced Billy Graham, led to the belief that
the second part of being “reborn” was to fight to reform society. He supported many of the reform movements of the 19th century. Many believed a reformed Christian society would hasten the Second
Coming.

Finney’s followers and Protestant
ministers became key figures in many of the reform movements of the 19^th
Century, including suffrage (women’s right to vote), abolitionism (abolishing
slavery), temperance (volunteer not drinking of alcohol), and a whole host of
religious-based groups to fight immorality and reform society. More recently, one thinks of the Civil Rights
Movement led by black ministers.

But religion can also be used to
justify racism, prejudice, and reactionary political movements. Colonial established churches believed that women should be silent on religious matters.

Defenders of slavery, including Southern
ministers, often quoted the Bible to justify slavery. Prohibitionists in the 19^th Century were
not above blaming much of the “immorality” of the times on Catholic immigrants,
especially the Irish. The same
religious-influenced populist movement has been used against the teaching of
evolution in public schools.

By historic standards, the United States has been a radical society. All areas of life are always changing,
including movement, social mobility and immigration. In an earlier post, I summarized this
dynamism as “permanent revolution.” It is not surprising then that at any given time, many people feel threatened or
morally repulsed by some aspects of social and cultural change. The long-held belief that power and status in America belonged to white, native-born Protestants continues into a more diversified society.

Times of heightened social or cultural change, such as the forces
unleashed in the 1920s or 1960s, and recently, seem to lead to a political backlash to slow
down or criminalize new types of behavior. There is often a moral or religious basis to this backlash.

Sometimes it is difficult to tell if religion’s influence is progressive
or reactionary.

Social change has political
consequences. Civil rights for blacks
led to the political issue of affirmative action. The changing role of women in American
society led to political issues like birth control and abortion. Legal tolerance of homosexuality led to the issue of gay marriage.

Religious-based moral reform
groups are single issue groups that are outside the political structure but attempt
to influence public policy and law. They
are willing to use the coercive powers of the state to impose their moral and
religious beliefs. They become political
pressure groups.

Like today, reform movements first
had success at the local and state levels before their reforms were adopted at
the national level.

In the 19^th Century,
there was a widespread belief that Christian-based social reform would hasten
the Second Coming. Some conservatives today
believe that American society has become so evil that it will lead to the
Second Coming.   Michele Bachmann all but
called President Obama the Anti-Christ and predicted his policies were leading
to the “end of days.” This
type of rhetoric is not new. Puritan
ministers like Cotton Mather were constantly berating New Englanders for the
“declension” (decline) of Puritan orthodoxy and looking for signs of the Second
Coming. He supported the Salem Witch
Trials as a tool to stop the spread of the devil’s influence, and only changed
his mind after dozens of witches (and one Puritan minister) were burned at the
stake. (In a typical New England coincidence, the interrogator at the Salem Witch Trials was the
grandfather of Nathaniel Hawthorne.)
Many people in America see moral decline as the most important issue in American
politics.

With the increased influence of
fundamentalism in American religion and culture, maybe the idea of Armageddon
has become a mental reality for more Americans. There seems to be a
lot of Armageddon movies in the last few years. Just as Martin Luther
called Rome “the whore of Babylon,” many Americans seem to think the same way about Washington. They see presidents and other elected politicians who support laws and programs they believe are evil. Not wrong, but evil. There can be no
compromise with evil. Arguments about reasonableness, tolerance, fairness, rule of
law, democratic process, fall on closed ears and minds. Opponents are demonized.

Americans have had a strong tendency to see social problems as moral
issues. Social issues usually have a
strong component of religion-based morality. Drugs is a current
example. Punishment for illegal
behavior, not reduction of usage or social costs, is the preferred policy. Until recently, only libertarians and most
economists, two notoriously materialistic and overlapping groups, disagreed. While some marijuana use is now legal, America has been racked by waves of illegal drugs use over the last six decades. Not even the wave of opioid and fentanyl drug deaths among young, male, white Americans has changed national opinion.

Over the last 60 years, we have
become a much more tolerant society. This has angered a lot of people,
especially older white, native-born Americans, the predominant constituency of
the social conservative and the tea party movements. It has also contributed to politicizing organized religion.

Great preachers in the past – Whitefield, Finney, Moody, Sunday, Billy Graham – were institution outsiders. They were not members of a particular Protestant denomination. If they founded a physical church, it was independent. They understood how to use the mass media of the day. Aimee Semple McPherson, who founded the widely popular “Foursquare” megachurch in 1923 after a long career as an itinerant preacher in America and Asia, had her own radio license and had applied for a TV license just before she died.

They did not identify or support any organized political group or party. They did not endorse political candidates. But for the last 40 years, the Republican Party has made conservative Christians and their organizations an important part of their political base. Republican elected officials and candidates appear at religious conferences. Religious leaders and denominations take political positions aligned with the right wing of the Republican party.

What will happen after Trump? The cooperation between some organized religious groups and religious leaders and the Republican party will probably continue. The legal barrier between the separation of church and state will continue to be challenged. Far-right politicians will continue to be speakers at national religious conventions.

INTERNATIONAL IMPLICATIONS

There are international implications to the political role of evangelical Protestantism. There are more Protestants in sub-Sahara Africa than in the United States. A large and rising minority of people in countries like Brazil, Guatemala and South Korea have become Protestants.  Pentecostal groups have been particularly successful in Brazil and Guatemala, and among Latino immigrants to America. Protestants, predominately Pentacostals, make up over 25% of the population of Brazil. Jair Bolsonaro, the right-wing former president of Brazil, made Protestant evangelical groups an important part of his political base.

The number of Protestants is also rising among the ethnic Chinese throughout East Asia, including China. Evangelical religion is also an important influence in Korean politics. In the future, there may be a religious overlay to the interaction of internal politics and American foreign policy in Asia and in Africa.

CONCLUSION

Political observers who assume
that American politics is about rationality, economic interests, and compromise have
underestimated the role of religious-based moral beliefs in politics. Economic analysts, with their libertarian bias and cost/benefit rationality, are tone deaf to the moral aspects of political conflicts. Voters will ignore their economic interests
if they strongly believe that government is supporting or protecting immoral
behavior.

In American history,
religious-based moral movements have strong staying power. They are sustained by deeply-held religious
beliefs that determine political reactions to continuous economic and social
change. The current ones are not going
away.

April 27, 2024
The Beginning of the Industrial Revolution in America

In the Beginning

PRECONDITIONS OF THE INDUSTRIAL REVOLUTION IN AMERICA

Before industrialization began in the 1820s, there was a set of political institutions and cultural values, mostly inherited from England, that encouraged profit-seeking individuals to start new companies.  They included fairly secure property rights, increasing legal limits on monopolies, an independent judiciary that enforced contracts, emphasis on individual rights rather than social obligations, patents, tolerance of markets, and less government regulation of markets than in the past.  Much of this was stated or implied in the Constitution; an activist Supreme Court under John Marshall extended these trends. The Constitution also helped to create a national market and reduce transaction costs by mandating a national currency and limiting states’ ability to make economic policy that favored their own residents.

What America did not inherit from England was important. Unlike England, the new United States did not have a king and a landowning nobility to siphon off capital. Settled by members of dissenting sects and persecuted religious minorities, there would be no state-supported national religion. As a consequence, capital would not be diverted to royal palaces, aristocratic castles, or cathedrals.

Economists interested in economic development often advocate land reform in a traditional agricultural society as a necessary first step to modernization. This breaks the power of the conservative landlord class. America did not have to go through this step. Laws were passed even before the Constitution that made free and cheap land available to everyone. America began as a nation of landowning farmers. Thomas Jefferson saw independent farmers as the foundation of a democratic society.

By winning the American Revolution, the new United States retained from England the political policies and ideas that would encourage individual economic “striving” and reject most of the English institutions opposed to progress and change. America was fortunate that it created a political structure, a democratic society, and an ideology that would support the coming Industrial Revolution.

In the early period of industrialization (1820-1870), a rapidly growing population (from 3 million in 1790 to almost 10 million in 1820 to 30 million in 1860) created an increased potential demand for new consumer products. Western expansion generated an agricultural surplus of commercial crops that were exchanged for cash to buy manufactured goods. Exports of cotton helped pay for imports of machinery, locomotives and manufactured goods.

These conditions together could encourage economic growth but not necessarily industrialization, the large-scale production of capital goods (machinery) and consumer goods using inanimate power (steam engines and waterwheels) to drive faster, more powerful machinery. For that to happen, mechanics, tinkerers, investors, and entrepreneurs had to invent, innovate and organize new finance, production, distribution and marketing methods. Economic development drove economic growth.

THE BEGINNING OF THE INDUSTRIAL REVOLUTION IN AMERICA

A key factor explaining why America industrialized so early and so quickly was the country’s continuing ties with England after the American Revolution. Americans quickly understood the profitable opportunities of the new production methods being created in England. Americans also had access to much of the scientific and technical knowledge being created and applied in England. Ambitious Englishmen with technical knowledge, like Samuel Slater the founder of the American textile industry, came to America because they had more opportunity here to get rich. Americans read English scientific and technical journals; often, American like Robert Fulton went to England to see the new methods and machinery. The future Baltimore and Ohio Railroad sent an engineer over to England to find out about English railroad technology even before England had completed its first general purpose railroad. American mechanics and engineers quickly adapted English railroad technology to the American environment.

One reason industrialization spread was the association of entrepreneurs with investment capital looking for new profit opportunities with mechanics interested in designing and developing new power-driven machinery, especially metal-working machinery.  In the beginning, many of the machine tools and power-driven machinery could be built using traditional craft skills, using traditional materials like wood and hand (or foot) operated tools. The power sources to drive the machinery were not a problem. Waterwheels had been used for hundreds of years in Europe; steam engines could be imported from England. They would soon be designed, improved and produced in America.

America’s wealthy merchant class was more willing than England’s merchant class to invest in new industrial ventures. The exception was railroads. There were speculative railroad investment booms in England in the 1840s and 1860s.

There were inspired geniuses like James Watt in England and Oliver Evans in America who greatly improved the steam engine, which had been in use in England since the early 1700s. Then modifications and adaptations of existing power-driven machinery and machine tools like lathes often led to large increases in productivity of particular products. In one early example, an American axe manufacturer hired a mechanic to design and development a die forging machine to produce axe heads. His machine increased the productivity of a single skilled striker and an assistant from 12 to 300 axe heads per day. It was these kinds of innovations that drove the Industrial Revolution.

Americans often surpassed the English in their ability to mass-produce products at a lower cost. American products were generally not as good as English products but their lower cost, plus constant improvement, led to a great deal of innovation and high growth rates. Americans developed a reputation of making it fast, making it cheap today and improving it tomorrow.


LABOR

There was no labor shortage for the factories and mines because of high birthrates, high rates of population growth, open immigration, and the use of women in the industrial workforce. This was also a high quality labor force with high literacy rates among native-born workers. Also, there were no entrenched guilds of craft workers to discourage introduction of new production techniques or influence the organization of work in the factories.

ADVANCES IN RAW MATERIAL PRODUCTION

The Industrial Revolution would have been a limited affair if not for the huge increase in the production of metals, especially iron. The new steam engines, machine tools, and machinery were made out of iron and other metals. Fortunately, much of the new production technology – smelting iron ore with anthracite (hard) coal or coke and puddling pig iron to reduce the carbon content for forging – had been worked out in England and Wales in the 1700s. Americans had access to or knowledge of this technology when the demand for iron skyrocketed after 1820. Entrepreneurs built larger furnaces, brought over the new Welsh technology of smelting iron ore with anthracite coal, installed steam engines to heat and blow air into the furnace, and recycled waste heat to raise temperatures. The result was a big increase in iron production at a lower cost per ton. The increasing production of iron for casting and forging eliminated a potential bottleneck to rapid industrialization.

Large amounts of iron would be vital to the development of the railroad industry.

TRANSPORTATION COSTS

The single largest transaction cost at the beginning of the Industrial Revolution was transportation costs. High overland transportation costs because of long distances and rugged terrain limited the size of markets and made products expensive.

These high costs were first attacked on a large scale with the building of canals, inspired by the spectacular success of the Erie Canal (fully opened in 1825). Overland transportation costs fell by about 80%. At the same time, steamboats on Western rivers reduced costs and permitted upstream navigation. America had the largest navigable river network in the world. Then, starting in the 1830s, came railroads, another new technology developed in England. Within two years, American mechanics and engineers were modifying English designs to match America’s harsher conditions. American companies began producing locomotives and other rolling stock. American railroad companies figured out how to lay down track quicker and at a lower cost than the better built railroads of England. This was an early example of the American business ethos – build it fast, build it cheap, get it up and running, generate revenue, then fix and improve it.

Compared to canals and steamboats, railroads offered huge increases in total carrying capacity, year-round operation, lower cost, greater flexibility and reliability, and big savings in time moving goods, people, and information. The explosion of needed information to run a large railroad created serious management problems, to say nothing of trains crashing into each other. The problem was partly solved by the creation of the telegraph. Railroads financed many of the early telegraph lines, often strung alongside railroad tracks.
Railroads also pioneered the decentralization of operations management into divisions that suggested the organizational structure for later industrial corporations.

Throughout the Industrial Revolution, America had by far the largest railroad transportation system in the world. It overcame large distances and supported western expansion. Railroads moved agricultural goods to urban markets and ports, and manufactured goods to rural areas. They were vital to the creation of a national market.

THE SPREAD OF THE INDUSTRIAL REVOLUTION

The thinking of Francis Cabot Lowell, a Boston merchant, was indicative of a new kind of mentality that was crucial to the success of the Industrial Revolution in America. He was a newly rich merchant looking for new investments. Lowell saw cotton textile production as an integrated system in one factory. He thought about how the different production steps could be coordinated in one, large mill to reduce handling costs and increase overall productivity. Lowell raised the investment funds from fellow Boston merchants to pay for the high upfront capital costs of constructing large buildings and textile machinery. He was the founder of America’s first large-scale manufacturing industry – cotton textiles. He is also famous because he went to England to steal the designs of power-driven looms.

What mill managers and mechanics subsequently learned from experience was that whenever they increased the productivity in any part of the production system it created bottlenecks elsewhere in the system. Better, faster machines would then have to be designed for other stages of production. This would create new bottlenecks; the process was one of continuous improvement in the production flow.

Back to the axe example. When die-forging machines made many more axe heads per hour, this created a serious bottleneck problem in the milling (or grinding) of the head into the right shape.  New power equipment was invented to plane (or sand) the heads faster than the old technology. This, in turn, put pressure on the methods to temper (or harden) the heads; innovative new specialized ovens were designed to increase the product flow and improve quality. This same process worked in all successful companies in all industries that adopted power-driven machinery.

Americans like Thomas Jefferson, Eli Whitney, and the technically trained officers of the army realized early the potential of the mass production of interchangeable parts that could be fitted together quickly by unskilled labor to produce and repair guns. Interchangeable parts, when fitted together with other interchangeable parts, eliminated the slow and expensive need for hand filing and fitting to make metal parts fit together. It took over 30 years to make the system operational. It made possible the mass production of new metal products such as sewing machines, typewriters, and automobiles. This new manufacturing process was so radical that English engineers called it the American System of Manufacturing.

The cumulative effect of this industrializing process was increasing productivity, higher volume of output, better quality and lower unit cost. This trend spread to other industries with the application of general-purpose machine tools to new uses. Itinerant mechanics adapted their knowledge and experience to modernize the production of new products. Techniques developed in one industry were often transferable to new industries. Success in one industry inspired entrepreneurs to apply the same methods in other industries.  This is how the Waltham Watch Company got started; the founder was inspired by a visit to the Springfield Armory, famous for the mass production of rifles. Sometimes this occurred in the same company; Remington went from producing guns to producing sewing machines to producing typewriters.

At first, industrial products were familiar products just produced at a lower unit cost by power-driven machinery in factories. Examples included cloth, shoes, paper, nails, clocks, and guns. Lower prices had the same effect as higher income; consumers had money left over to buy more of other products. But as production technology advanced – new and more specialized machine tools, the mass production of steel and the ability to work new materials – it became possible to design and produce new, complicated metal consumer and producer durables. New production techniques developed, such as the stamping rather than the grinding of parts. This led to the mass production of the automobile.===============================================================

For a general discussion of American history between 1789 and 1860, see

A New Nation, American History from 1789 to 1860

Compare the American experience with that of England:

The Beginning of the Industrial Revolution in England

For the limits of Adam Smith’s thinking in explaining the origins of the Industrial Revolution, see

Adam Smith’s Pin Factory

For an excellent example of an entrepreneur at the beginning of the Industrial Revolution in England, see

Josiah Wedgwood, the Wedgwood Pottery Company, and the Beginning of the Industrial Revolution.

For the story of how England lost its economic leadership, see

A Cautionary Tale: England and the Industrial Revolution.

For a list of all posts, see List of Posts by Topic.

April 25, 2024
How America Industrialized and Became Wealthy
INTRODUCTION

This post and the next is on
the topic of economic development and its contribution to economic growth. Since the beginning of the Industrial
Revolution more than 200 years ago, this is the central economic dynamic.

The following are factors that led to American economic
development, many in place before the beginning of the Industrial
Revolution. The United
States, more than any other country, was
positioned to take advantage of the new technology and ideas that were the
basis of the Industrial Revolution. The
following is an outline of those factors.
For the full story of the early decades of America’s Industrial Revolution, see Engines of
Change and some of the excellent histories written about America
after the Revolution.

FACTORS IN AMERICAN ECONOMIC DEVELOPMENT AND
GROWTH

The usual narrative centers on the inventors and entrepreneurs
who developed and commercialized new production and transportation technology and technological
improvements. They also invented new
organizational structures to exploit the new technology, both on the supply and
demand side.

This post looks at contributing factors that made the
American experience exceptional.  The United States
began innovation after England, the country that started the Industrial Revolution, but quickly caught up. By the mid-1800s, America has surpassed England in key technologies.  Innovation has continued up to the
present. Why?

RADICAL POLITICAL, CULTURAL AND
SOCIAL CONDITIONS CONDUCIVE TO SUPPORTING THE INDUSTRIAL REVOLUTION

The United States
had developed social, political and cultural institutions that were supportive
of the market capitalism version of the Industrial Revolution before it began. Because of the American Revolution, there was
an aversion to a strong central government, which at the time was dominated and supported favored
pre-industrial classes or groups.
- No
  rent-seeking (parasitic) royalty or nobility.
- No
  state-supported church.
- Limits
  on government-supported monopolies. (By rulings of the Marshall Supreme Court)
- No
  guilds to retard innovation, factories and new forms of labor relations.
- A
  Constitution giving the Federal government wide powers to support a
  national economy and limiting states’ ability to “restrain” trade among states.
- A
  culture emphasizing individual responsibility and individual opportunity.
- A
  radical political system, a democracy based on universal white male suffrage.
- Wide dissemination of information among a literate public.
- A
  mobile social system and open society that encouraged risk-taking.
ENGLISH LEGAL INSTITUTIONS, ESPECIALLY PROTECTION OF
PRIVATE PORPERTY, PATENTS, AND
ENFORCEMENT OF CONTRACTS

Strong English tradition of protecting private property
and enforcing contracts.

Underlying law and custom protecting the rights of
individuals.

Patent law to protect innovations.

ACCESS TO ENGLISH INDUSTRIAL TECHNOLOGY AND
APPLIED SCIENCE

England
was the first country to industrialize. Some
important aspects:
- Innovative
  methods to smelt iron, increasing quantity and lowering unit cost.
- The application
  of more efficient steam engines and water power to drive machinery. Beginning of factories. Large increases in quantity and reduction in unit cost.
- Steam engine power-driven
  textile mills and then railroads.
- More
  accurate machine tools to produce machinery and metal products.
- Tradition of entrepreneurs and innovative mechanics, machine tool makers and engineers
- Continuous invention and improvement; cumulative large increases in productivity.
Most of this technology, and the ideas behind them, were transferred
quickly to America,
changed to fit American conditions, and improved. Some transmission channels:

English immigrants.

An English immigrant named Samuel
Slater built the first            water-powered cotton spinning mills.

Welsh ironmasters who knew how to
use anthracite coal to smelt iron.

Contacts with England,
both personal and scientific.

Imitating or
stealing English technology.

Francis Cabot Lowell and the
integrated, power-driven textile mill.

Steam engines and locomotives. Americans went to England
to study the English development of locomotives and railroad technology even
before the English built the first general-purpose railroad.

Within two years of the first
English railroad, Americans were importing English locomotives, adapting them
to American conditions, and manufacturing them.

Robert Fulton first learned about steamboats in England.

Access to English scientific and
technical publications.

Establishment of American
scientific societies to discuss new ideas and technologies, and disseminate the
knowledge.

HUGE NATURAL RESOURCES

In early decades, vast quantities of wood, iron ore, anthracite
coal, fast-flowing streams and rivers for water power.

The United States
would continue to be the world’s leading producer of almost all key minerals
and fossil fuels (coal, oil, natural gas) until after WWII.



Huge potential agriculture.

Development of commercial
agriculture, starting in colonial period.

Commercial production for market.

                        Surplus
food for industrial workforce.

                        Main
source of exports until 20^th Century.

CONTINUING IMMIGRATION

In the colonial period and until 1860, slaves and indentured
servants produced most of America’s
exports that helped pay for the importation of European capital goods and
technology.

Over the last 200 years, there have been as many as 75
million immigrants. Immigrants have been
an important factor in American economic development from the very beginning.

Free human capital.

Mostly young adults. Much of the
cost of raising them to adults, their education and acquisition of knowledge
and skills paid before they came to America. Crucial “free lunch.”



Like Sam Slater,
many brought specialized skills and knowledge.

Disproportionate number of innovators and entrepreneurs.

  Created
vast and growing internal market.

Early on, America’s
democratic ethos and the existence of an open society created opportunity for
advancement for lower-class mechanics and millwrights unavailable in England. They could become part-owners of new business
establishments based on their technical knowledge. This was the beginning of what I call the
“hustler and the nerd” model of economic innovation. From Samuel Slater and Amos Brown (cotton spinning) to William
Clark and Isaac Singer (Singer Sewing Machine) to Silicon Valley
(scientific and computer nerds and venture capitalists).

For the first 100 years of the Second Industrial Revolution (1870 – 1970), all industrializing societies, including America, ignored the “negative externalities.” As had all societies before then. This meant the producers, distributors, and consumers did not have to pay the full cost of their activity. Some examples of negative externalities are destroying the natural environment (clear-cutting forests, water pollution, air pollution, dangerous and deadly work places, noise pollution, accidents and death (auto fatalities and injuries), terrible unhealthy slum living conditions). It was only with the exponentially cumulative effect of all negative externalities that governments began to deal with them.

CONCLUSIONS

In economics, Milton Friedman popularized the phrase “There
ain’t no such thing as a free lunch.” This
may be true in a closed economy but not in an open society like the United
States that allowed immigration, imported (stole) ideas and technology, and provided
the resources and opportunity to develop new technologies and economic
institutions.

A more formal phrase for a free lunch is “positive
externalities.”   A positive externality
occurs when someone benefits from someone else’s actions without paying for
it. For the American private sector as a
whole over the last 200 years, there has been lots of free lunches.

            Tens of
millions of young adult immigrants.

                        Brought
labor, skills, education and knowledge.

            Access to
knowledge of foreign technology.

This combination reduced the cost and increased the speed of industrial innovation.

Immigrants, shut out of traditional and high-status careers,
look for or created new opportunities. They had to
be innovative but had opportunities for advancement not available elsewhere. A recent study concluded that immigrants are twice as likely to start new businesses than native-born Americans.

The point is that continual economic development depends on a country’s political, cultural, and social institutions, not just on its economic institutions.

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A related post:

The Beginning of the Industrial Revolution in America

These posts on early American history give some detail on the factors discussed in this post:

American Colonial History, 1607-1775

Revolution and the New Country; American History, 1775-1790

A New Nation, America from 1789 to 1860

For an excellent example of an entrepreneur at the beginning of the Industrial Revolution in England, see

Josiah Wedgwood, the Wedgwood Pottery Company, and the Beginning of the Industrial Revolution.

See related posts:

After reading this post, you might want to see the related post on the first case study of a source of economic development, Adam Smith’s Pin Factory.

For the story of how England lost its economic leadership, see A Cautionary Tale: England and the Industrial Revolution

For the economic dynamics within this wider environment, see A Stylized Model of Innovation: The Dynamics of Capitalism.
November 27, 2018