The Dawn of Innovation (55 page)

16
S. Colt, Impt. in Fire Arms. Patent No. 1304, August 29, 1839. There would be many more improvements, but this patent moves the appearance and the mechanisms of the pistol much closer to those of the 1850s and 1860s. A number of the improvements Colt cites in his 1855 lecture (discussed later in this chapter) are first seen in this patent.

17
Lawton to Colt, August 3, 1837, in Box 1, Colt Correspondence, CHS.

18
Haven and Belden,
History
, 389.

19
Colonel Samuel Colt, “On the Application of Machinery to the Manufacture of Rotating Chambered-Breech Fire-Arms,”
Excerpt Minutes of the Proceedings of the Institution of Civil Engineers
, vol. 11, November 25, 1851 (London: William Clowes and Sons, 1855), 12.

20
Rosenberg,
American System
, 32–39.

21
Report from the Select Committee on Small Arms: Together with the Proceedings of the Committee, Minutes of Evidence, and Appendix
, 1854 (236), Testimony of Mr. J. Nasmyth, 123, Qs. 1662 and 1663.

22
Report of the Committee on the Machinery of the United States of America
, reprinted in Rosenberg, ed.,
American System
, 87–197, at 89.

23
“Colonel Colt's Small Arms Manufactory,”
Newton's London Journal of Arts and Sciences
n.s. 13, vol. 3 (1856): 1–11, 65–75.

24
Some details of the building are from Howard L. Blackmore, “Colt's London Armory,” in
Technological Change: The United States and Britain in the 19th Century
, S. B. Saul, ed. (Suffolk, UK: Methuen & Co., 1970), 171–195.

25
“Colonel Colt's Small Arms,” 4.

26
Nasmyth Testimony, Q. 1441.

27
Quoted in Rosenberg,
American System
, 45–46.

28
Charles Dickens, “Description of Colonel Colt's Fire-Arm Manufactory,”
Household Words
, May 27, 1854, reprinted in Appendix to Colt, “On the Application.”

29
Report on Machinery
, 128.

30
“1908, Cadillac Precision Stuns Europe,”
Generations of GM
,
http://history.gmheritagecenter.com
./wiki/index.php/1908,_Cadillac_Precision_Stuns_Europe

31
My judgment, from the James-Sam correspondence.

32
Haven and Belden,
Samuel Colt
, 62–63.

33
Colt, “Application of Machinery,” 13; David Hounshell,
From the American System to Mass Production
(Baltimore: Johns Hopkins University Press, 1984), 23, 21.

34
Hounshell,
From the American System
, 67–89, supplemented by multiple Willcox & Gibbs collectors' websites.

35
Hoke,
Rise of the American System
, 133.

36
Ibid., 132–178.

37
Ibid., 180–253.

38
See tables in Allen H. Fenichel, “Growth and Diffusion of Power in Manufacturing,” in
Studies in Income and Wealth
, vol. 30:
Output, Employment, and Productivity in the United States After 1800
, ed. Dorothy S. Brady (New York: National Bureau of Economic Research, 1966), 443–478.

39
Duncan M. McDougall, “Machine Tool Output, 1861–1910,” Brady, ed.,
Output, Employment
, 502.

40
Robert A. Margo, “The Labor Force in the Nineteenth Century,” in
The Cambridge Economic History of the United States
, vol. 2:
The Long Nineteenth Century
, Stanley L. Engerman and Robert E. Gallman, eds. (New York: Cambridge University Press, 2000), 214.

41
Eric Foner,
Free Soil, Free Labor, Free Men: The Ideology of the Republican Party Before the Civil War
(New York: Oxford University Press, 1970), 301–307; Roy E. Basler, ed.,
The Collected Works of Abraham Lincoln
, 9 vols. (New Brunswick, NJ: Rutgers University Press, 1953–1955), 3:361–363; Wilma A. Dunaway,
The First American Frontier: The Transition to Capitalism in Southern Appalachia, 1760–1860
(Chapel Hill: University of North Carolina Press), 268–272.

42
Commodity and physical output data are from Robert S. Manthy,
Natural Resource Commodities—A Century of Statistics: Prices, Output, Consumption, Foreign Trade, and Employment in the United States, 1870–1913
(Baltimore: Johns Hopkins University Press, 1978), Tables N-1, 2, 4, and 5; MC-11, 20, and MO-3; for food, Tables AC-11, 12, 9, and 10. There are no comprehensive data on railroad loadings for this period, so I took a sample of large roads from the relevant
Poor's Manual of Railroads
(Henry V. Poor,
Poor's Manual of Railroads
[New York: Poor's Publishing, 1869]). For the Chicago, Burlington and Quincy; Lake Shore and Michigan and Southern; New York Central; Pennsylvania; and Union Pacific from 1871 (1872 for Union Pacific) to 1877, freight tonnage rose, respectively, 135 percent, 46 percent, 40 percent, 47 percent, and 89 percent, which is roughly consistent with the increases in commodity output. The 6.2 percent annual real growth rate is from the
Historical Statistics of the United States, Millennial Edition
, Tables Ca9-19, for the years 1870–1880. The phenomenon is even sharper if measured from 1869–1879. Nominal annual growth was only 1.2 percent, but real growth, at 4.4 percent, was 3.7 times as high.

43
Robert E. Gallman, “Economic Growth and Structural Change in the Long Nineteenth Century,” in Engerman and Gallman, eds.,
The Long Nineteenth Century
, 1–56; Ra-jabrata Banerjee, “The US-UK Productivity Gap Since 1870: Contributions from Technology and Population,” Working Paper 2011–03, Centre for Regulation and Market Analysis, University of South Australia, Adelaide, Australia.

1
The story summarized in this chapter was the primary subject of my book
The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy
(New York: Henry Holt, 2005).

2
Henrietta M. Larson,
Jay Cooke, Private Banker
(Cambridge, MA: Harvard University Press, 1936).

3
Hiram A. Drache, “The Day of the Bonanza: A History of Bonanza Farming in the Red River Valley of the North,” (Fargo, ND: North Dakota Institute for Regional Studies, 1964).

4
Jimmy M. Skaggs,
Prime Cut: Livestock Raising and Meatpacking in the United States, 1607
–
1983
(College Station, TX: Texas A&M University Press, 1983), 50–89 (ranching) and 90–129 (meatpacking); and Robert Adudell and Louis Cain, “Location and Collusion in the Meatpacking Industry,” in Louis P. Cain and Paul J. Uselding, eds.,
Business Enterprise and Economic Change: Essays in Honor of Harold F. Williamson
(Kent, OH: Kent State University Press, 1973), 85–117.

5
A. L. Holley and Lenox Smith, “American Iron and Steel Works, No. XXI, the works of the Edgar Thomson Steel Works (Limited),”
Engineer
(London), April 19, 1878, 295–301; April 26, 1878, 313–317; May 17, 1878, 381–384.

6
Jeanne McHugh,
Alexander Holley and the Masters of Steel
(Baltimore: Johns Hopkins University Press, 1980), 253.

7
Peter Temin,
Iron and Steel in Nineteenth-Century America: An Economic Inquiry
(Cambridge, MA: The MIT Press, 1964), “Appendix C: Statistics of Iron and Steel,” 264–285 (for American prices); D. L. Burn,
The Economic History of Steelmaking, 1867
–
1939: A Study
in Competition
(Cambridge, UK: University Press, 1940), 103 (for British fob rail export prices.) Elbert Gary testimony in
Hearings before the Committee on Investigation of United States Steel Corporation
, 8 vols. (Washington, DC: U.S. Government Printing Office, 1912), I:220.

8
Allan Nevins,
John D. Rockefeller: The Heroic Age of American Enterprise
(New York: Charles Scribner's Sons, 1940), 1:486.

9
Harold F. Williamson and Arnold R. Daum,
The American Petroleum Industry
, vol. 1:
The Age of Illumination, 1859–1899
(Evanston, IL: Northwestern University Press, 1959), 6.

10
This section closely follows my treatment in
The Tycoons
.

11
Paul Bairoch, “International Industrialization Levels from 1750 to 1980,”
Journal of European Economic History
11, no. 2 (Fall 1982): 269–333; Stephen N. Broadberry and Douglas Irwin, “Labor Productivity in the United States and the United Kingdom During the Nineteenth Century,” NBER Working Paper 10364, March 2004; W. Arthur Lewis,
Growth and Fluctuation, 1870–1913
(London: George Allen & Unwin, 1978), 17–18.

12
J. Stephen Jeans, ed.,
American Industrial Conditions and Competition: Reports of the Commissioners Appointed by the British Iron Trade Association to Enquire into the Iron, Steel, and Allied Industries of the United States
(London, 1902), and Frank Popplewell,
Some Modern Conditions and Recent Developments in Iron and Steel Production in America
(Manchester, UK: University Press, 1906).

13
Jeans,
American Industrial Conditions
, 306–307.

14
Popplewell,
Some Modern Conditions
, 103.

15
Jeans,
American Industrial Conditions
, 121.

16
D. L. Burn,
The Economic History of Steelmaking, 1867–1939: A Study in Competition
(Cambridge, UK: University Press, 1940), 208, 106.

17
A conversation with the author.

18
Jagdish Bhagwati and Douglas A. Irwin, “The Return of the Reciprocitarians: U.S. Trade Policy Today,”
World Economy
10, no. 2 (June 1987): 113.

19
Burn,
Economic History of Steelmaking
, 312.

20
Jeremiah Whipple Jenks,
The Trust Problem
(Garden City, NY: Doubleday, Page and Co., 1914), 44.

21
American rail prices from Peter Temin, “Appendix C: Statistics of Iron and Steel,” in
Iron and Steel in Nineteenth-Century America: An Economic Inquiry
(Cambridge, MA: MIT Press, 1964), 264–285; British fob rail export prices from Burn,
Economic History of Steelmaking
, 103.

22
Niall Ferguson,
The House of Rothschild
, vol. 2:
The World's Banker, 1849–1999
(New York: Viking Penguin, 1999), background at 360–368, quote 367.

23
Historical Statistics of the United States, Millennial Edition
, Table Ee7.

24
Lance E. Davis and Robert C. Cull, “International Capital Movements, Domestic Capital Markets, and American Economic Growth, 1820–1914,” in
The Cambridge Economic History of the United States
, vol. 2:
The Long Nineteenth Century
, Stanley L. Engerman and Robert E. Gallman, eds. (New York: Cambridge University Press, 2000), 733–812.

1
My understanding of Chinese issues was greatly advanced by a series of roundtable discussions at the Council on Foreign Relations, coordinated by Jerome Cohen of New York University and Elizabeth Economy at the Council. Speakers included, among others, Nicholas Lardy of the Peterson Institute; Kerry Brown, University of Sydney; and Patrick Chovanec of Tsing Hua University. I also benefited from discussions with Dr. Economy and Matt Pottinger, a Council fellow.

2
Michael Spence,
The Next Convergence: The Future of Economic Growth in a Multispeed World
(New York: Farrar, Straus and Giroux, 2012), Chapter 16: “The Middle-Income Transition.”

3
Ann Woolner et al., “The Great Brain Robbery,”
Businessweek
, March 15, 2012.

4
Siobhan Norman, “Chinese Hackers Suspected in Long-Term Nortel Breach,”
Wall Street Journal
, February 14, 2012.

5
U.S.-China Economic and Security Review Commission, “2011 Report to Congress of the United States,” November 2011, 174–175; Art Coviello, Executive Chairman of RSA, “Open Letter to RSA Customers” (undated),
www.rsa.com
./node.aspx?id=3872

6
John Bussey, “China Venture Is Good for GE but Is It Good for the United States?”
Wall Street Journal
, September 30, 2011; Audrey Cohen, “GE to Develop Avionics with Chinese Firm,”
Seattle Post-Intelligencer
, January 19, 2011.

7
David Caploe, “China High-End Value Added—The German Connection,”
Economy Watch
, September 14, 2010.

8
James McGregor, “China's Drive for ‘Indigenous Innovation': A Web of Industrial Policies,”
U.S. Chamber of Commerce
(2011): 4.

9
Ibid., 27–29.

10
Elizabeth C. Economy,
The River Runs Black: The Environmental Challenge to China's Future
, 2nd ed. (Ithaca, NY: Cornell University Press, 2010); “China's Growing Water Crisis,”
World Politics Review
, August 9, 2011; “China's Global Quest for Resources and Implications for the United States,” testimony Prepared for the U.S.-China Economic and Security Review Commission, January 26, 2012; Edward Wong, “Plan for China's Water Crisis Spurs Concern,”
New York Times
, June 1, 2001.

11
“A Comparison with America Reveals a Deep Flaw in China's Model of Growth,”
Economist
, April 21, 2012; “The Consequences of an Aging Population,”
Economist
, June 23, 2011.

12
“Table A.33: World Population Prospects: The 2010 Revision,” Population Division, Department of Economic and Social Affairs, United Nations; Nicholas R. Lardy,
Sustaining China's Economic Growth After the Financial Crisis
(Washington, DC: Peterson Institute of International Economics, 2012), 126.