Interregional Trade in the USA - Essay Example

Since the early 19th century, the United s has served as a global model of economic progress. An expanding population permeated with a strong sense of individualism and competitive spirit, eagerly exploited the seemingly limitless supply of land and natural resources, producing technological innovation and unparalleled economic expansion that elevated the quality of life for most of its citizens (Ratner et al, 2003). One of the major factors credited for making the United States the economic, industrial, and trade giant that it is, was domestic trade or the internal market that existed among the different regions that made up the Early Nation.

The growth of the United States economy in the period from 1790 to 1860 can be seen in terms of expansion and growing complexity (Suranovic, 1997). The local market relations that existed before canals and railroads were personally run on trade and a mixture of cash and barter. With the growth of the South’s cotton industry in the period after 1815, the country branched out and developed an interregional trade system that was structured around a growing number of banks and currencies (Whitman, F.K., 2000, p. 535). Between 1807 and 1815, U.S. foreign trade was severely disrupted by Jefferson’s trade embargo, subsequent non-importation measures, and the War of 1812.

These disruptions are commonly believed to have spurred early U.S. industrialization (Zuckerman, 2006). Because of the aforementioned disruptions, especially the embargo, domestic industry was encouraged, and emerging local industries were protected from import competition by preventing foreign manufactured goods from reaching the U.S. market (Davis, J.H., 2003, p. 228). Due to the resulting trend of interregional trade, new manufacturing firms were established and existing domestic producers rapidly expanded output to replace previously imported goods (Zuckerman, 2006).

Interregional trading also led to the American economy becoming industrialized, first in the Northeast, in order for inter-region commerce to become more convenient (Herbst, 1997). New inventions and capital investment led to the creation of new industries and economic growth. As transportation improved, new markets continuously opened. The steamboat made river traffic faster and cheaper, but the development of railroads had an even greater effect, opening up vast stretches of new territory for development.

Furthermore, the United States became an economic power with the dramatic expansion of domestic markets, as the set of regional economies integrated to form a national economy consequently making the U.S. economy the leading industrial nation in the world.