Economic history of the United States
The 325-mile Erie Canal, which connected Albany, New York, on the Hudson River with Buffalo, New York, on Lake Erie, began operation in 1825. Wagon cost from Buffalo to New York City in 1817 was 19.2 cents per ton-mile. By Erie Canal c. 1857 to 1860 the cost was 0.81 cents. The Erie Canal was a great commercial success and had a large regional economic impact.
History of New York City (1784–1854)
New York, with a population of 96,000 in 1810, surged far beyond its rivals, reaching a population of 1,080,000 in 1860, compared to 566,000 in Philadelphia, 212,000 in Baltimore and 178,000 in Boston. Historian Robert Albion identifies four aggressive moves by New York entrepreneurs and politicians that helped it jump to the top of American cities. Of greatest importance, it sponsored the Erie Canal which began operations in 1825, forming a continuous water route from New York north to Albany via the Hudson River, then west to Buffalo using the new canal to reach the Great Lakes. It opened a large new market in upstate New York and the Old Northwest. New York set up an auction system that efficiently and rapidly sold imported cargoes to the highest bidder. Exporters from Britain discovered New York offered the best prices for their goods, and they increasingly ignored Boston and Philadelphia, where the local merchants tried to impose higher markups by avoiding auctions. New York began the world's first regular packet service to England with the Black Ball Line in 1818. By 1830, it dominated the nation's merchant marine. Ambitious shippers reached beyond the natural hinterland to open large-scale coastal trade, especially one that brought Southern cotton to New York for export to textile mills in the Northeast and in Europe, and carried manufactured products to the South. By 1830, 40 cents of every dollar the mills paid for cotton went to New York brokers to cover the cost of shipping. The main rivals, Boston Philadelphia and Baltimore, tried to compete with the Erie Canal by opening their own networks of canals and railroads; they never caught up. Manufacturing was not a major factor in the city's growth in the 19th century—factories were chiefly being built in towns and smaller cities with waterfalls and fast rivers that were harnessed to generate the power, or were closer to coal supplies.