History’s Blueprint for Rebuilding America’s Economy

Drive across the country — or even just a few states, as I’ve done lately — and you’ll see multitudes of closed factories.

Per government statistics, there are tens of thousands of former industrial facilities out there.

Most of these businesses simply closed shop and moved to China or elsewhere. The process left millions of Americans looking for “other” jobs, which usually didn’t pay as well.

I’ve discussed this before, of course — including how globalized economics has ruined much of the American middle class.

And indeed, there’s much more to be said about the fall of American manufacturing.

But my trip to various American historical sites got me thinking about our industrial rise.

In the days during and just after the Revolutionary War, the U.S. was not a wealthy place. It was primarily an agricultural outpost of the British Empire. (I recently discussed some of these points, too.)

So what enabled the U.S. to become wealthy and powerful?

Well… History offers insight into how to rebuild the “next” American economy.

Let’s dig into this…

During my recent trip through upstate New York and Vermont, I was on the lookout for clues about the origins of American industry.

I avoided interstate highways and drove along state roads, through old commercial districts. I visited old mill- and factory-towns that birthed the industrial revolution in America.

Along the way, something hit me…

The amount of pure, bedrock geology that made the U.S. industrial revolution possible.

Indeed, the U.S. is in many ways a “nation made by glaciers.”

The story of human development is that people clear land, plant crops, raise livestock, build houses and towns… and connect it all via roads.

That is, people alter the landscape. They build an environment in which to survive, find comfort and even prosper.

But it’s also fair to say that landscapes and environments alter the people — meaning that some aspects of nature are simply too predominant to change.

Thus people in deserts tend to develop a “desert” outlook. People in forested regions tend to view the world through trees. People in mountains adapt to different elevations and microclimates.

Which is another way of saying that geology plays a big role in shaping human activities.

Consider the westward-moving settlers in the fledgling United States, in the late 1700s/early 1800s. Many of them set off into the wilds of upstate New York.

Why “upstate?”

Well, aside from the fact that there was no Pennsylvania Turnpike or Interstate 80, it was a matter of geology!

Here’s a physiographic map that shows the general layout of New York. And the river system looks much like a capital “T” laying on its side.

Lake Champlain

Physiographic map showing Lake Champlain, Hudson River & Mohawk River water channels.1

The Adirondack and Catskill Mountains hem in New England to the east. And rough terrain extends well south into New Jersey and northeast/central Pennsylvania.

So from New England region down through New Jersey, the most expeditious way “west” has long been to move up the Hudson River Valley, usually by boat.

Then at Albany, the only realistic track westward was (and still is) is through the Mohawk River Valley.

Another way to say it is that mobility within New York is controlled by three major river valleys: Hudson and Lake Champlain, north-south; and Mohawk to the east-west.

Across Pleistocene time — the past million years or so — these valleys were literally carved out by mile-thick glaciers. Then they were further sculpted by torrential outflows of meltwater.

In fact, the lower Hudson valley sluiced so much meltwater that there’s a massive channel in the seabed offshore New York City, stretching far out onto the continental shelf.

Eventually, sea level rose by nearly 300 feet as glaciers melted. And the river basins and carved-out areas became what are called “drowned valleys.”

The harbor at New York City is a drowned valley. So are other well-known American harbor areas, such as Boston, Chesapeake Bay, San Francisco, Puget Sound and many more. Offshore islands, too, are usually former hills in Pleistocene time, cut off from mainland by rising seas.

It’s worth noting that the Hudson River is so integrally connected to the sea that ocean tides affect water levels as far north as Albany. And the Hudson is so deep that oceangoing vessels can sail there, about 135 miles upstream from New York harbor.

All of this helps explain why New York has long been a bustling, dynamic, wealthy city (pre-Mayor Bill DeBlasio, of course). It’s built around one of the world’s great shipping and transit hubs.

Now, consider Albany, upstream along the Hudson. It began in 1614 as a Dutch fur-trading post, established just south of where the Mohawk River flows into the Hudson.

This confluence of two large rivers was key to siting the eastward end of Erie Canal. Proposed in the 1780s, surveyed in the 1790s and built between 1817–25, the canal offered a passable route “from Albany to Buffalo.”2

And the Erie Canal — all of 4 feet deep, 40 feet wide and 363 miles long — was a magnificent piece of engineering and infrastructure that literally “built” a large element of the nation.

The Erie Canal enabled large volumes of barge traffic to move east-west, opening up the Great Lakes and “Northwest Territories” from Ohio to Minnesota.

The canal lowered shipping costs by as much as 95% between the coastline and the interior of North America.

Or consider the boatbuilding, shipping, provisioning and other aspects of transit from New York into the continent interior… There was plenty of wealth to be made on that alone.

Not to mention how the interior of the U.S. developed over time, courtesy of those glacially carved, New York river valleys which permitted transit.

But navigable rivers and convenient valleys weren’t geology’s only gifts to creating a wealthy and powerful America.

Courtesy of those long-vanished glaciers, upstate New York was left with vast numbers of scoured-out ravines, and ample soil in which trees grew.

With trees, there was lumber, firewood and the means to produce charcoal for smelting metals, such as iron ore from the Adirondack Mountains.

And with ravines, there was ample falling and running water, which is another way of saying “concentrated energy.”

New York was (and still is) filled with places to impound water and use it to turn a wheel, with which to power a mill.

Consider a place like Watertown, New York, settled in about 1800 at the eastern end of Lake Ontario, and situated along the fast-moving Black River.

Watertown, NY

Watertown, NY, along the Black River.3

The Black River has a 500-foot vertical drop within just a few miles near Watertown. So it’s no wonder that the place became a manufacturing hub in the first half of the 19th century.

Watertown, NY

Watertown, NY; American hub of manufacturing in 19th century.

According to one local history:

“Settlers were drawn to the area by the abundance of cheap, natural power. Dam after dam was erected on the Black (River), especially near Watertown where the stream was flanked by high limestone cliffs creating a deep and narrow gorge.”4

With available waterpower, factories sprang up. These included paper mills, iron foundries, flour mills, textile mills and much more. It was a major manufacturing center.

It may be difficult to imagine in the present day, but the small village of Watertown was once among the most prosperous locales in the U.S.  The town made all manner of useful things and sold them across the growing nation.

Famous citizens of Watertown include Frank W. Woolworth, who pioneered the concept of a modern department store.

And Watertown was but one of many other cities that sprang up out of the combination of access to the energy from falling water, coupled with reliable, low-cost transportation along lakes, rivers and the Erie Canal and its eventual north-south spurs.

Here’s another map of New York, filled with famous names in American manufacturing…

Erie Canal

Erie Canal, showing side network.5

So that’s how the U.S. grew from an agrarian nation into one of vast wealth and power. The process was due, in no small part, to the fortuitous nature of the very landscape; the “post-glacial” landscape.

Early American businesses had access to energy, transport and raw materials.

Couple this with sound money and a predictable legal system, which came about after the Whiskey Rebellion…

Together they form the seed for rapid growth in national-scale industry, commerce and wealth.

Obviously, though, it’s 2020 now…

Factories today don’t run on wheels turned by waterfalls… although don’t discount hydropower at a variety of scales. After all, Grand Coulee Dam kind of speaks for itself.

But history kindly offers us clues, if not a blueprint, about what it takes to rebuild industry in America, and to recreate national wealth.

The basics for a country to grow and prosper are energy, transportation and a stable currency and legal system.

That’s true whether you drive a horse and wagon, or use electric cars and jet airplanes.

And creating a “new” industrial economy for America — not necessarily recreating the old one — will be a multi-generational effort.

The U.S. spent 40 years deindustrializing, closing and abandoning the work of nearly two previous centuries. And it’s a stretch to think that this can all be somehow restored (or perhaps a better term is “resurrected”) in a short amount of time.

But the good news in all of this is that history outlines a way for us to make a national comeback… If only American culture and politics will permit it.

The optimist in me says that it’s more than doable… If only the country makes a collective decision to build things versus burn them down.

On that note, I rest my case.

That’s all for now…  Thank you for subscribing and reading.

Best wishes,

Byron King

Byron King
Managing Editor, Whiskey & Gunpowder
WhiskeyAndGunpowderFeedback@StPaulResearch.com

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1 National Geographic Society

2 Bruce Springsteen sings “Erie Canal”

3 Black River

4 Black River

5 Leadr

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A Harvard-trained geologist and former aide to the United States Chief of Naval Operations, Byron King is our resident gold and mining expert, and we are proud to have him on board as the managing editor of Whiskey & Gunpowder.

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