A Survey of Economic Development to 1900

Economic development is an integral part of any historical narrative about a town, state, or nation. Especially if we want to know how human activities have affected land use and the environment in our communities—a topic addressed in most elementary curricula in Vermont and New Hampshire—we need to look closely at how economies have evolved. What did the early settlers do to provide for their basic needs of shelter, food, and clothing? How were natural resources used to make goods? What kind of infrastructure was necessary to enable an economy to grow? When did money become important and how did it change the nature of commerce? How have the ways that people in our communities used the land changed over time, and how has the environment itself been changed? And finally, if we take stock of the first 150 years or so in the life of our towns, what would we say have been the most important developments?

Subsistence was the order of the day for the early settlers in our Vermont and New Hampshire towns. They cut down trees, prepared the soil for planting grains and vegetables, and created pastures to graze their animals. The first houses were made of logs, but within a few years of settlement most villages had at least one sawmill, and eventually these log cabins were replaced by larger houses made of sawn wood. Gristmills also sprang up early on the abundant streams in the region, because people wanted to turn corn and wheat into flour for making bread. These families were largely self-sufficient, growing their own food and making their own clothes and household items. But even from the earliest years of settlement, families traded or bartered surplus goods with each other for things they didn’t produce themselves. The first general stores usually carried some goods imported from beyond the region—including commodities like sugar and coffee produced by slaves in the West Indies—even before 1800. But until well into the 19th century very little money was in circulation in these mostly rural communities far removed from the centers of commerce. Most of the buying and selling at general stores and the shops of other merchants and artisans was done on a debit-credit basis through trade or barter.

Many of the earliest farms were established in the hills rather than on the valley floors. Hill locations were considered safer for avoiding confrontations with Native Americans, and perhaps as having better soil. But as the threat from Native Americans diminished after the Revolution, and as mills and meetinghouses were erected closer to or on village plains, populations began to coalesce around downhill parts of towns. Webs of social interaction thickened as population densities increased closer to village centers.

Various natural resources provided people of an entrepreneurial bent with opportunities to develop small-scale industries. Trees seemed nearly infinite and the early settlers (and their descendants) consumed them with abandon. Wood was initially used for buildings, bridges, and roads. Potash, used to make soap, glass, and fertilizer, was made by burning trees that were cleared to open land for agriculture. Many Vermont and New Hampshire farmers produced potash for sale, and it was even exported from New England to Great Britain, which had been deforested. Large-scale timber harvesting for export began early in the 19th century; Burlington was one of the nation’s busiest lumber ports in the 1870s, and the Connecticut River log drives of the post-Civil War period are legendary. The discovery of mineral deposits led to other extractive industries around the region: iron, granite, marble, copper, and slate (the latter three primarily in Vermont) were the most important through the first part of the 19th century, and these involved foundries, smelters, and other processing works along with mines.

Textiles were the most important industry in early- and mid-19th-century Vermont and New Hampshire. Making cloth from cotton and wool began as handwork inside the home, but by the turn of the 19th century workshops were being set up for multiple operatives, and by the 1810s mills for fulling (washing) and carding cloth were sprouting up all around both states. The Amoskeag Company, which would become the largest textile mill complex in the world in the early 20th century, was established in Manchester, N.H., in 1837. A textile boom accompanied the sheep boom that swept up farmers in both states between about 1820 and 1845. This began when William Jarvis imported 400 Merino sheep from Spain to his farm in Weathersfield, Vermont, in 1811. Farmers soon realized that the robust and productive Merinos thrived in the environment of northern New England, and because tariffs on imported wool were high, a new “cash crop” was born. Along with agriculture, raising sheep, producing wool, and making woolen cloth were the major economic activities in Vermont and New Hampshire until the Civil War. The great sheep craze also had a huge environmental impact, as farmers everywhere rushed to clear cut forests and open up land where sheep could graze. Until the boom went bust—largely because of a reduction in the wool tariff that opened up competition from abroad—sheep were the most lucrative thing going in this region.

About the time the sheep boom ended in the 1840s, the railroads arrived in Vermont and New Hampshire and created a new set of economic transformations. Railroads dramatically lowered the cost of transportation for shipping all kinds of goods within and from the region. This made it profitable for farmers and manufacturers to sell products into previously unaffordable markets, thereby stimulating some economic growth. One good example is the granite industry in central Vermont, which exploded after the Civil War as train tracks were laid out to the quarries and sheds. But the railroads also brought a flood of goods into the region from places where they could be produced more cheaply. Many Vermont and New Hampshire farms could not compete with western farms and eventually gave up trying. As transportation improved and markets expanded, it was simply too hard to make a living from agriculture on the rocky and worn-out soils of northern New England. This was the primary reason that so many people sought opportunities elsewhere. The population of Vermont stagnated or grew very slowly from about 1850 into the early 20th century, and many towns shrank by shocking numbers as people left for the west or the larger communities in the state. (For an overview, see “Migration from Vermont,” , page 3.)