Economic History Association

Steam and Waterpower in the Early Nineteenth CenturyAuthor(s): Peter TeminReviewed work(s):Source: The Journal of Economic History, Vol. 26, No. 2 (Jun., 1966), pp. 187-205Published by: Cambridge University Press on behalf of the Economic History AssociationStable URL: http://www.jstor.org/stable/2116227 .Accessed: 11/10/2012 05:52

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Steam and Waterpower in the Early Nineteenth Century*

Water-falls are not at our command in all places, and are liable to be ob- structed by frost, drought, and many other accidents. Wind is inconstant and unsteady: animal power, expensive, tedious in the operation, and unprofitable, as well as subject to innumerable accidents. On neither of these can we rely with certainty. But steam at once presents us with a faithful servant, at com- mand in all places, in all seasons.

OLIVER EVANS1

T HE use of steam power in manufacturing has long been recog- nized as an important part of the English industrial revolution,

but in studies of the United States the role of the steam engine in manufacturing has been overshadowed by its application in rail- roads. This paper attempts partially to redress the balance by exam- ining the use of stationary steam engines in America about 1840. Section I explores the characteristics of the supply of stationary engines in America, contrasting the engines used in America with those used in Britain. Section II discusses the demand for steam engines, that is, the factors underlying the choice between steam and waterpower in different industries.

The examination as a whole provides a new example of the dif- fusion of an innovation in the American setting. It therefore provides a new chance to assess some generalizations about the nature of American technology. Both the plausibility of these generalizations and the extent to which our imperfect knowledge allows us to either confirm or refute them are in question.

I

The improvements by James Watt in the late eighteenth century for the first time permitted the steam engine to be employed for

* I would like to thank Robert Zevin for his many helpful comments on power use in the cotton-textile industry, Donald Cimilluca for his help with the calculations, and William Parker for his criticism of an earlier draft. I would also like to acknowledge financial support from the Inter-University Committee on the Micro-Economics of Technological Change, in turn supported by the Ford Foundation, and the Sloan Research Fund of the Sloan School of Management, M. I. T. This paper was pre- sented to a conference sponsored by the Inter-University Committee held in Phila- delphia, March 24-25, 1966.

1The Young Steam Engineer's Guide (Philadelphia [1826]), p. 1. This book was a reissue of Evans' Abortion of the Young Steam Engineer's Guide, first published in 1805.

187

188 Peter Temin industrial purposes. The Watt engine, like the Newcomen engine that preceded it, was a "low-pressure" engine; that is, it derived its power from the pressure of the atmosphere acting against a vac- uum produced by the condensation of steam. Shortly after 1800 a new type of engine, the "high-pressure" engine, was introduced. This engine used steam at higher than atmospheric pressure to push against the atmosphere in the same way that the low-pressure en- gine used the atmosphere to push against a vacuum. It therefore operated without a condenser; the steam was exhausted into the air at the end of the stroke, and the cumbersome apparatus for con- densing it and producing a vacuum was lacking.

The possibility of using high-pressure steam was known before 1800, but its use required well-made boilers and accurately ma- chined cylinders and pistons-items which were not within the skills of machinists before the start of the nineteenth century.2 As a result of many improvements in the years around 1800, some pos- sibly connected with the production of low-pressure steam engines, mechanical skill was improved to the point where high-pressure steam could be employed. The high-pressure steam engine with cylindrical iron boilers was introduced simultaneously in Britain and America by Richard Trevithick and Oliver Evans in 1803-1804.3 That this development, which was an application of new mechani- cal skills to known mechanical principles, should have come simul- taneously in both countries is an indication of a community of skill in the two lands, at least among a few adventurous machinists.

The high-pressure steam engine fared differently in the two coun- tries in ways that are not easily understood. One authority states that Trevithick's engine was widely adopted in Britain soon after its invention, while Evans' engine was opposed and neglected in the United States.4 Yet thirty years later almost all stationary steam engines in Britain were low-pressure engines and almost all those in America used high pressure. Since the development of the

2 See Joseph Wickham Roe, English and American Toolbuilders (New York: McGraw-Hill, 1926), chs. i, ii.

3 H[enry] W[inram] Dickinson, A Short History of the Steam Engine (Cambridge, Engl.: The University Press, 1939), pp. 95-97. Evans was called by some "The Watt of America." Robert H. Thurston, A History of the Growth of the Steam-Engine (Ithaca: Cornell University Press, 1939), p. 159.

4 Dickinson, pp. 95-97. 5 Journal of the Statistical Society of London (later, Journal of the Royal Statistical

Society), II (Jan. 1840), 440; U. S. Congress, House, Report on the Steam Engines in the United States, H. Doc. No. 21, 25th Cong., 3d sess., 1838. Referred to here-

Steam and Waterpower 189 steam engine after 1838-for example, the invention of the Corliss engine encouraged the use of high rather than low pressure, it might not be unfair to say that Americans were using the more advanced technology by that time. On the other hand, the economic significance of this difference in the 1830's is not apparent.

Beyond the records of Evans' attempts to maintain his patent monopoly on the construction of high-pressure engines, the record of the early adoption of steam engines in America is very fragmen- tary." About a dozen steam-powered plants are mentioned in the 1820 Census, the McLane Report of 1833 has notices of over one hundred stationary steam engines in use in 1831, and the 1838 Report on Steam Engines records over one thousand in use as of that date. Unfortunately, although over one hundred of the engines enumerated by the 1838 Report on Steam Engines were built in 1831 or before, only about a dozen engines appear in both the 1831 and 1838 surveys.7 The McLane Report is known to be incom- plete, and the absence in it of the engines mentioned later may be attributed to this failing. The Report on Steam Engines was known by its authors to be incomplete in some areas, but has been accepted as complete for the regions in which the McLane Report found steam engines.8 If this is so, then almost all of the steam engines existing in 1831 must have worn out by 1838.9

after as Report on Steam Engines. Only 65 out of 305 stationary steam engines in Birmingham were high pressure, while only 63 out of over 1,200 stationary steam engines in the United States were low pressure in 1838.

I There were at least 10 steam engines built in America before Evans introduced his, and his engine was pirated extensively in the years before 1825. In fact, the opposition to Evans was probably a reaction to his attempted patent monopoly and his litigious personality, rather than to his invention: a reflection of the demand for the high-pressure engine, not of its lack. See J. Leander Bishop, A History of American Manufactures from 1608 to 1860 (3 vols.; Philadelphia, 1866), I, 502, 510, 534, 547, 577; Victor S. Clark, History of Manufactures in the United States (3 vols.; New York: McGraw-Hill, 1929), I, 408-9; Greville and Dorothy Bathe, Oliver Evans: A Chronicle of Early American Engineering (Philadelphia: Historical Society of Pa., 1935), pp. 207, 265. Evans' patent expired in 1825; ibid., pp. 220-21.

7 Clark, I, 409; U. S. Congress, House, Documents Relative to the Manufactures in the United States, collected by the Secretary of the Treasury, Louis McLane; Exec. Doc. No. 308, 22d Cong., 1st sess., 1833; Report on Steam Engines.

8Allen H. Fenichel, "Growth and Diffusion of Power in Manufacturing, 1838- 1919" (paper delivered to the Conference on Research in Income and Wealth, Chapel Hill, 1963), uses the Report on Steam Engines for an estimate of steam power in manufacturing with no additions.

9 It is possible that some of them were sold and that the same engine sometimes appears in both reports under different ownership. This is occasionally recorded in the Report on Steam Engines (e.g., p. 294), but it does not appear to have been common.

190 Peter Temin

The limited life of American steam engines is also apparent in our information on the engines built by Oliver Evans and his suc- cessors. Evans died in 1819, and the firm of Rush & Muhlenberg succeeded him, Rush being Evans' son-in-law and Muhlenberg his partner. Of the engines built by Evans himself, only one-built in 1817-survived to be included in the 1838 Report on Steam En- gines. In addition, the average age of the engines built by Rush & Muhlenberg was only five years, just one stationary engine built by them before 1828 surviving till 1838. Finally, the Pittsburgh Steam Mill, established in 1809 by Evans, was by 1838 using an engine built in 1828.10

English steam engines, some authors believed, never wore out, but American engines apparently did."1 American engines could have been made more carelessly than British engines; high-pressure engines could have worn out more quickly than low; or the high opinion of British engines may be unfounded. In any case, since most American engines wore out within a decade, it cannot be supposed that the Report on Steam Engines contains information about the use of steam power for any but a few years immedi- ately preceding 1838.

The data in the Report indicate that steam-engine construction in 1838 was a small-scale business carried on for a predominantly local market. The approximately 1,100 steam engines existing in 1838 whose builders are known were built by 250 different builders, the average builder making less than five steam engines. Of these builders, 131 had built only one engine, including 31 engines built for the builder's own use. The ability to build steam engines clearly was widely distributed by 1838, and economies of scale were not important. On the other hand, there were a few large engine build- ers; 25 builders had made over 10 engines apiece, and six had made over 30. There is no evidence, therefore, that there were either economies or diseconomies of scale in the production of steam engines.12

10 Bathe, pp. 207, 278-79; Report on Steam Engines, pp. 192, 215. We do not know that Rush & Muhlenberg were making engies in the early 1820's, our informa- tion on the firm being derived from the 1838 ata. But it would be surprising if the firm maintained its existence through the 1820's while building only a single steam engine in its first six years. It made three steamboat engines in 1826-27. The Report on Steam Engines (p. 165) lists a second engine built by Oliver Evans, but as the date of its construction is given as 1830 the attribution is uncertain.

11 Dickinson, p. 106. It should be noted that the average age of the low-pressure steam engines shown in Table 2 is higher than that of U. S. engines as a whole.

12 These data were calculated from the Report on Steam Engines.

Steam and Waterpower 191 The importance of a national market for American economic de-

velopment has been stressed by many writers.'3 The small-scale nature of steam-engine production suggests that the national market may not have been important for the diffusion of this particular

TABLE 1 LOCUS OF CONSTRUCTION OF STATIONARY STEAM ENGINES

IN VARIOUS REGIONS, 1838 (MNMBER OF ENGINES)

Location of Engine Location of New Middle Total

Builder England Atlantic West South U.S.

New England 260 2 1 2 265 Middle Atlantic 35 288 2 69 394 West 11 343 38 392 South 2 55 57 England 3 1 14 18 Unknown 6 38 30 28 102 Total number of

engines observed 304 342 376 206 1,228 Number of engines

estimated or reported with incomplete dataa 13 36 124 215 388

Total number of engines allocated by Report to different regions 317 378 500 421 1,616

Source: Report on Steam Engines. The definition of regions is as follows: New England: Maine, N. H., Vt., Mass., Conn., R. I.; Middle Atlantic: eastern N. Y., eastern Pa., N. J., Dela., Md., D. C.; West: western N. Y., western Pa., Ohio, Mich., W. Va.; South: Va. (excluding W. Va.), N. C., S. C., Ga., Fla., La.

a The engines listed as estimated or inadequately reported are those for which only a location was given; an additional 244 engines were assumed by the writers of the Report to exist, but their presumed location was not given. They apparently were built in Louisville, and therefore probably were located in the South and West. (See the Report, pp. 321-26, 376.) If Louisville is considered part of the South, the inclu- sion of these engines in the table would sharply reduce the difference between the South and the other regions.

innovation-an implication borne out by the data shown in Table 1 on the interregional trade in steam engines. With the exception of the South, interregional trade was clearly minimal; the only sig- nificant non-southern exchange was the use in Connecticut of en- gines built in New York. The South, however, built only one third of the engines it used whose origin is known. Pittsburgh and English

13 See Douglass C. North, The Economic Growth of the United States, 1790-1860 (Englewood Cliffs, N.J.: Prentice-Hall, 1961), pp. 166-68, and, for machinery, Roe, p. 109.

192 Peter Temin

engines were used in Louisiana, and Baltimore and Philadelphia engines were used in Virginia. The "national" market in steam engines existed only in the sale of northern-built engines in the South.14

It has also been asserted that the backward linkage from textiles to machinery production was important, being "strategic" for the development of the machinery industry--the seventh largest in- dustry in 1860.1' Fully 90 per cent of the value added in the machinery sector shown by the 1860 Census, however, was ac- counted for by the production of steam engines.-' And, as Table 1 shows, the middle Atlantic and western regions were self-sufficient in steam engines by 1838 despite the absence of a well-developed textile industry in these regions. Whatever the link between the makers of textile machinery and of steam engines in New England, the builders of steam engines in other regions do not seem to have suffered from its absence.

With the possible exception of the South, therefore, the ability to make steam engines was widespread.17 As most American steam engines were high-pressure engines, it can be inferred that the ability to make high-pressure engines was easy to acquire. The continued use of low-pressure engines in Britain then cannot be attributed to an inability to make high-pressure engines in that country. Nor can the residual use of low-pressure engines in the United States in 1838 be explained by such a hypothesis. All but two of the American builders of stationary low-pressure engines had also built high-pressure engines existing in 1838, and five of

14 The precise numbers in Table 1 depend on the definitions of regions, but the conclusions do not. The regional breakdown used here differs from that used else- where primarily in its division of several states into two regions. This results from the use of the Allegheny Mountains as the division between the Middle Atlantic and the western regions and the allocation of what is now West Virginia to the West rather than to the South. As the mountains were a far greater barrier to trade than state boundaries, this division is preferable to the more usual one. (See the notes to Table 1 for the possibility that the difference between the South and the other regions was exaggerated.)

15 North, pp. 159-62; Nathan Rosenberg, "Technological Change in the Machine Tool Industry, 1840-1910," JOURNAL OF ECONOMIC HISTORY, XXIII (Dec. 1963), 418-20.

16 Eighth Census of the United States, III, Manufactures of the United States in 1860 (Washington, 1865), 738.

17 The South is only a possible exception, as it may have been more profitable to use imported steam engines in the South than to build them. The pattern of trade shown in Table 1 would then have been the result of southern exploitation of their comparative advantage, not a reflection of their lack of knowledge.

Steam and Waterpower 193 the six largest stationary steam-engine builders also made a few low-pressure engines.18

The hypothesis that American practice rested on accurate theory not known or believed in England fares no better. Oliver Evans argued for the use of the high-pressure engine on theoretical grounds, resting his case on the results of recent experiments which seemed to show that the product of pressure and volume was an exponential function of temperature. If the heat were raised, the pressure of steam in a constant volume therefore would rise more than proportionately. The use of high temperatures and pressures was by this means rendered economical.' The experiments, un- fortunately, were not accurate, and the form of the ideal gas law is not exponential. The product of pressure and volume is only a linear function of temperature, and the argument of Evans cannot be used to justify the use of high pressure.

If Evans was mistaken in his theory, his opponents were equally confused. One argument current in the 1830's asserted that the same quantity of water converted to steam gives the same mechani- cal effect whatever the pressure.20 This conclusion followed from the assertion that for a given weight of water the product of the pressure and volume of the resultant steam was a constant. If the pressure of steam were increased, its volume and therefore the distance through which it would act would be reduced proportion- ately. The amount of work obtained by boiling a given quantity of water was therefore supposed to be constant and independent of the pressure. The error in this reasoning lies in the unstated as- sumption that pressure is increased only by reducing the volume and never by raising the temperature. Since steam pressure can be raised by heat, there is no reason for the product of pressure and volume of steam from a given weight of water to be constant.

The theory of the steam engine was not worked out until after 1840, and all theoretical discussions of the benefits of high-pressure

18 Report on Steam Engines. There were nine American builders who made more than one low-pressure engine and fourteen who made only one. There were also, of course, some English builders making high-pressure engines; 65 such engines existed in Birmingham in 1838. Journal of the Statistical Society of London, II (1840), 440.

19 Evans, The Young Steam Engineer's Guide, pp. 5-11. 20 Dionysius Lardner, The Steam Engine Familiarly Explained and Illustrated

(3d American ed., from the 5th London ed.; Philadelphia, 1836), pp. 279-80; James Renwick, Treatise on the Steam Engine (2d ed.; New York, 1839), pp. 161-63.

194 Peter Temin steam engines before then were bound to be inadequate.2' In addi- tion, since the efficiency of steam engines varied with the type of boiler and the extent to which steam was used expansively, and since the range of efficiency was wide in both England and America, it is hard to know whether there was a systematic difference be- tween the efficiencies actually attained with the two types of en- gines. The only explicit comparison I have discovered showed no difference.22

Further evidence for the competitiveness of high- and low-pres- sure steam engines at this time is provided by the continued use of high-pressure engines in steamboats on the western rivers of the United States and of low-pressure engines in steamboats along the Atlantic coast. Western steamboats used high-pressure engines because of their light weight and flexibility; eastern steamboats continued to use the safer-for steamboats-low-pressure engines.23 Neither the advantages nor the disadvantages of high pressure in steamboat operation were present for stationary steam engines, yet the geographical difference in steamboat practice was carried over into the realm of stationary steam engines. Table 2 shows the re- gional distribution of low-pressure engines; the northeastern regions built their own, and the South imported them from England. None of the low-pressure steam engines in the United States in 1838

21 See Thomas S. Kuhn, Energy Conservation as an Example of Simultaneous Discovery," in Marshall Clagett, Critical Problems in the History of Science (Madison: University of Wisconsin Press, 1959), pp. 321-56.

22 For the range of efficiency as measured by coal consumption see the discussion in Part II below. The Philadelphia Water Works had a Boulton and Watt engine and an Evans engine, which they compared in the period 1815-22. The two engines operated the same diameter pump and used roughly the same amount of fuel per gallon of water pumped. The relative capital costs, etc., are not known; Bathe, p. 227. Clark, I, 409, asserts that high-pressure engines were more wasteful of fuel than low-pressure engines, and that they were used for that reason in the United States. This seems to be an inference from the "loss" of the heat of vaporization in the high- pressure steam engine; see also Louis C. Hunter, Steamboats on the Western Rivers (Cambridge: Harvard University Press, 1949), pp. 132-33.

The problem of comparison is complicated by the fact that the'distinction between high- and low-pressure engines was not as sharp as has been implied here. The dis- tinguishing characteristic of a low-pressure engine was the possession of a condenser, but a wide variety of engines had condensers. The Comish engines in Britain used condensers and high-pressure steam (Dickinson, p. 104).

In addition, high-pressure engines were smaller and cheaper than low-pressure engines (Hunter, pp. 129-30). This may have been partially offset by more rapid depreciation of high-pressure engines, as our discussion has suggested, and its sig- nifcance is not clear.

23 Report on Steam Engines; Hunter, pp. 130-33. Hunter also says high-pressure engines used more fuel.

Steam and WaterPower 195 TABLE 2

STATISTICS OF LOW-PRESSURE STEAM ENGINES BY REGION, 1838 New Middle

England Atlantic West South Total Total number 14 30 19 63 Number imported

from England 1 13 14 Average age

in years 2 11 11 9 Source: Report on Steam Engines. The regions are the same as those in Table 1.

were being used west of the Allegheny Mountains, and none had been built in the West.

This, of course, was not just a coincidence. Several important makers of steam engines made both stationary and steamboat en- gines; their numbers are shown in Table 3. Most important builders

TABLE 3 NUMBER OF MAJOR STEAM-ENGINE BUILDERS IN THE

UNITED STATES, BY TYPE Builders Who Had Made Five or More Engines of

Type of Engine the Specified Type or Types Existing in 1838 Stationary 56 Steamboat 20 Locomotive 11 Stationary and steamboat 17 Stationary and locomotive I Steamboat and locomotive 1 All three types Source: Report on Steam Engines.

of steamboat engines also made stationary engines, and it is not surprising that the pattern in the marginal use of low-pressure sta- tionary engines followed the practice in steamboat engines. How- ever, only about one third of the important builders of stationary steam engines were also important builders of steamboat engines, and the existence of the two thirds who did not make steamboat engines should be remembered when generalizing about the im- portance of transfers of skills between the different types of steam- engine builders. (The same caveat applies, a fortiori, for transfers of skills between builders of locomotive engines and the builders of other types of steam engines. )24

24 The classification of builders who had made five or more engines of a particular type as "important" builders of that type is an arbitrary classification designed to eliminate the case of major builders of one type of engine who had also made one or two engines of another type.

196 Peter Temin

The difference between American and British practice thus ap- pears more as a matter of style than of economy. The British prac- tice may be attributed to Watt's conservatism and the American lack of fear of explosions; but there is no evidence that British practice was less efficient than American by 1840 nor that stationary high-pressure engines were any more dangerous than low-pressure engines.25 After 1840, with the introduction of the Corliss engine in the United States, it is possible that the British preference for low- pressure engines was a disadvantage, but that is a separate story.

II

We turn now to the demand for steam power for industrial uses, in particular the cost elements affecting the choice between steam and waterpower in various industries and locations. The two sources of power were competitors, but not exact substitutes. Three differ- ences are of importance. First, since waterpower was available only at fixed locations, its use generally involved transport charges on materials and products. Second, although steam power could be generated anywhere, its location away from a source of coal or wood involved transport charges on the fuel. Third, capital costs formed a greater part of the total costs for waterpower than for steam power, and the choice between the two at any location was affected by the interest rate.

The relative costs of steam and waterpower for two groups of New England cotton mills about 1840 are shown in Table 4. Since both water and steam power were being used in cotton mills at this time, it is not surprising to find that costs were nearly equal. Had they been unequal, the capital goods used in one or both processes would have been revalued to produce equality. If large profits or large losses were then being made by the suppliers of either waterwheels or steam engines, the suppliers of one or the other type of equipment would have soon left the market. But since both types of equipment continued to be supplied, there is no ap- parent evidence of such a disequilibrium.26 The importance of the

25 Dickinson, p. 91; D. S. L. Cardwell, The Organisation of Science in England: A Retrospect (London: Heinemann, 1957), pp. 80-81; Hunter, pp. 132-33, 289-304.

26 Clark, I, 410, asserted that steam power was five times as expensive as water- power about 1840. He did not take into account the differences between the two sources of power, however, and his data cannot be taken as evidence of a dis- equilibrium in this market.

Steam and Waterpower 197 three differences between steam and waterpower therefore can be seen from the cost comparison of Table 4.

(1) The costs in Table 4 are the costs for mills located in a favorable location for each type of power. The steam mills were lo-

TABLE 4 A CONTEMPORARY ESTIMATE OF POWER COSTS FOR

COTTON MILLS, ABOUT 1840 (ANNUAL COST PER HORSEPOWER IN DOLLARS)

Costs Water Steam Capital costs

Water rights 200 Steam engine 150 Waterwheel, gearing, etc. 190 Foundations 90 20

Total 480 170 6 per cent of total 29 10

Operating Costs Coal for steam engine 35 Wages to operate engine 7

Other costs dependent on power source Heat for factory 11 Transportation costs 8

48 52 Source: [Charles Tillinghast James], Strictures on Montgomery on the Cotton Manu-

factures of Great Britain and America (Newburyport, 1841), pp. 20-32. James gives total costs for mills containing 30,000 and 17,000 spindles for the water and steam power estimates, respectively. I converted these to costs per horsepower at the rate of 15HP/1,000 spindles for waterpower and 1OHP/1,000 spindles for steam power. The difference resulted from the use of different kinds of spindles in the two sets of mills. See ibid., pp. 26, 37; James Montgomery, A Practical Detail of the Cotton Manufacture of the United States of America (Glasgow, 1840), pp. 214-16.

cated at Newburyport, on the Atlantic coast, where it was not necessary to transport goods or fuel overland to the mills. The water-powered mills were located at Lowell, a desirable spot for mills using waterpower as the sum of direct power costs and trans- portation expenses was comparatively low. Industries using materi- als heavier than cotton would have had larger overland transporta- tion costs to a waterpower site; industries using local materials- such as sawmills and flour mills-would have incurred only small charges for transport.27

27 The cost of transportation shown in Table 4 was divided approximately equally between the cost of transporting raw cotton and the finished textiles and the cost of bringing coal for heat. The costs of transporting the cotton seem to have been under- stated by James, as a result of an understatement of the cotton used per spindle.

198 Peter Temin (2) Coal was used to fire steam engines in New England, al-

though wood could also have been used. The cost of the coal in- cluded the cost of transporting it from Pennsylvania to Newbury- port; it was consequently more expensive than it was in Pennsyl- vania, and cotton mills had less incentive to use coal than did plants located near coal mines.28

(3) The data in Table 4 show that capital costs were a far more important part of the costs of waterpower than of steam power. At a 6 per cent interest rate, 60 per cent of the costs resulting from using waterpower were capital costs, while only 20 per cent of the costs of using steam power were in that category. If the interest rate were higher, the relative cost of waterpower would increase. The capital costs in Table 4 cannot be accepted at face value, however, as there is no allowance for depreciation. The payment for water rights was a payment to locate within the large river development of the Proprietors of Locks and Canals at Lowell. It therefore rep- resented a share of the cost of building the dams and canals neces- sary to obtain power from the river. Depreciation on these struc- tures and on the mill foundations may be assumed to be negligible. On the other hand, steam engines depreciated rapidly-as the com- parison of steam engines in 1831 and 1838 showed-and water- wheels were also impermanent. Although waterwheels cost more than steam engines, they almost certainly depreciated more slowly

This is offset, however, by a possible overstatement of the cost of heat. Users of steam power could use the steam for heat if they used high-pressure engines, but there is no evidence that this was widespread. James' mills did not do so, and the extra cost for heat incurred by using waterpower may have been a cost in theory only. See Montgomery, p. 157; J. C. Merriam, "Steam' in Eighty Years' Progress of the United States (Hartford, 1869), p. 253; De Bow's Review, VII (1849), pp. 128-34.

28 The annual cost figure for coal consumption in Table 4 implies an hourly coal consumption of 3-4 pounds per horsepower (at the following rates: $6.50 per ton of coal; 2,000 pounds per ton; 300 working days per year; 10-11 working hours per day). The range of coal consumption in England and America at this time was from about 2 to about 10 pounds per horsepower per hour, reflecting the diversity of engines and practice about 1840. Evans, p. 60: PMaull R. Hodge, The Steam Engine, Its Origin and Gradual Improvement (New York, 1840), pp. 119-20; Journal of the Franklin Institute, n.s., XXV (1840), p. 342; James (see Table 4, Sources), pp. 66-68.

The practice assumed by James was good, but not the best; it appears to be the rate his own mills were getting. The James Steam Mills were using about 4 pounds in the early 1850's-it is possible that they were using almost as little ten years previously. They used 5.5 pounds of coal per horsepower per hour for both heat and power. As a condensing engine was used, a deduction for the coal used for heating must be made to discover the coal consumption for power alone. Assuming the ratio of fuel for power and for heat shown in Tale 4 held in the 1850's, the 4-pound rate can be derived. The engine in question was replaced in 1855 by a Corliss engine using about half as much fuel (Merriam, p. 253).

Steam and Waterpower 199

and probably added a smaller depreciation charge to the total costs.29

These three differences between water and steam power in- creased the incentive of western industries to use steam. In the flat Midwest, waterpower was scarce, coal was cheap, and capital was dear. On the other hand, the specific locational requirements of individual industries may have been more important in determining

TABLE 5 PERCENTAGE DISTRIBUTION OF STEAM POWER AND OF VALUE

ADDED IN MANUFACTURING BY INDUSTRY GROUPS, 1838

Steam Value Steam Power Power Added Value Added (percentage of total in (ratio to average

all industries) in all industries)G

Average users of steam power Textile products 13 13 1.0 Primary metals 12 10 1.2

Heavy users of steam power Food products 33 11 3.0 Lumber and wood products 23 10 2.3

Light users of steam power All other industries 19 56 0.3

Source: Fenichel, Table B-10; Gallman, p. 59. Approximately one fourth of the total power was estimated (primarily in the food products and lumber and wood products industries), as was approximately one half of the value added. (See Fenichel, pp. A-8 to A-10; Galiman, p. 59.)

a Derived by dividing the entries in the first column by the corresponding entries in the second.

the demand for steam power than the general influence coming from location in the West. We therefore turn to an examination of in- dividual industries.

Data on the distribution of steam power in 1838 appear in Table 5, where industries are placed into three groups according to the ratio of the steam power used to the value added produced in the industry. We seek to explain the proportion of each industry's power derived from steam. The grouping of industries in Table S-adopted due to the absence of data on total power utilization in 18383?--is

29 The allowance for depreciation includes both the direct charge for depreciation and a reduction of the capital costs to take account of the declining balance of invested funds. If both steam engines and waterwheels depreciated at a linear rate of 10 per cent per year, the annual capital costs of the two sources at a 6 per cent interest rate would fall from 60 per cent of total costs for water and 20 per cent for steam to 40 and 10 per cent respectively.

30 See Fenichel, Table B-8, for data on total power usage by industry in 1869.

200 Peter Temin

heavily influenced by the total need for power in the various indus- tries, and it therefore does not necessarily correspond to a grouping based on the proportion of an industry's power derived from steam. Nevertheless, the data in Table 5 can be used to derive estimates of the proportion of steam power used in some industries.

The ratio of steam power to value added for all manufacturing in 1838 was about .15 horsepower per $1,000 of value added.31 According to the data in Table 5, this ratio was the same for the textile industry as a whole. As most textile mills were cotton mills, and as the average steam-powered cotton mill of the time used ap- proximately one horsepower for every $1,000 of value added, we may infer that about 15 per cent of all value added produced in textile mills was made in mills using steam power about 1840.32

The costs of steam power were falling relative to the costs of waterpower at this time, and builders of the newer mills had a greater incentive than their predecessors to use steam. If 15 per cent of existing mills were using steam, a higher proportion of the new mills must have been. The data are broadly consistent with the hypothesis that American manufacturers were using the newest technology at a reasonable rate; more than that cannot be said with confidence. The more interesting question concerns the differences between the cotton industry and other industries. Do the differences between the two sources of power noted above explain the dif- ferential use of steam and of waterpower in different industries?

The primary-metals industry-in which the iron industry occu-

31 Report on Steam Engines, p. 379; Robert Gallman, "Gross National Product in the United States, 1834-1909" (paper delivered to the Conference on Research in Income and Wealth, Chapel Hill, 1963).

32 This result was obtained by dividing the ratio of horsepower used per dollar of value added for the industry as a whole by the ratio to steam-powered cotton mills alone. The use of power in steam-powered cotton mills was derived as the product of the power used per spindle and the value added per spindle (Montgomery, pp. 124-25, 214-16).

Woolen textiles represented a sig cant proportion of the textile industry, and their presence renders the above calculation even more speculative than it would be for the cotton industry alone. If woolen mills did not use any steam power, the conclusion in the text is unaffected. If they used some steam power, the figure in the text is too low (high) if the horsepower used in woolen mills per dollar of value added was lower (higher) than in cotton mills. In addition, water-powered mills used more power per spindle than steam-powered mills (due to the use of a different type of spindle), and the proportion of power used in the textile industry in 1838 that was generated by steam was only about 10 per cent. See the note to Table 4.

33 The average coal consumption per horsepower declined steadily in the first half of the nineteenth century, while the technology of waterpower utilization remained relatively stable up to the introduction of the water turbine after 1840. In addition, waterpower in New England was beginning to become scarce after about 1830. See Hodge, p. 120; Clark, I, 404.

Steam and Waterpower 201 pied a position similar to the position of the cotton industry in textiles-was the other industry with a ratio of steam power to value added similar to that for all manufacturing. By a calculation similar to, but more speculative than, the one used for the cotton industry, we may infer that about 25 per cent of the power used in the iron industry was generated by steam.34

The iron industry was located outside New England and produced a product that was heavy in relation to its value. Both factors should have encouraged the use of steam power; yet, although the use of steam in ironworks in 1838 was greater than its use in the cotton industry, our very approximate data indicate that it still was limited. An explanation for the continuing preference for water- power is not hard to find: it was the result of using charcoal for fuel. Charcoal cannot be transported easily, and ironworks using charcoal have to be located in extensive woodlands where they can make their own charcoal. As water was also needed for cooling, there was little inconvenience in locating the works at a waterpower site. And as the direct costs of waterpower were lower than the direct costs of steam power, waterpower continued to be used.

The influence of charcoal was on the wane in 1840. Rolling mills

34 The ratio of value added per employee was about one third (36 per cent) more for the iron industry than for industry as a whole in 1859, and this may be projected back to 1838 (George Rogers Taylor, The Transportation Revolution, 1815-1860 [New York: Holt, Rinehart and Winston, 1951], p. 243; Stanley Lebergott, Manpower in Economic Growth [New York: McGraw-Hill, 1964], p. 510). Multiplying this ratio by the ratio in the last column of Table 5 gives the ratio of steam power per employee in the iron industry to the steam power per employee in industry as a whole. The amount of steam power used in 1838 amounted to .072 horsepower per employee for manufacturing as a whole, implying that the ratio was about .12 for the iron industry (Report on Steam Engines, p. 379; Lebergott, p. 510). In a steam-powered rolling mill, about .85 horsepower per employee was used; in a steam-power blast furnace, about .37 (horsepower data from the Pennsylvania returns in the Report on Steam Engines; employment data from Peter Temin, Iron and Steel in Nineteenth-Century America [Cambridge: M.I.T. Press, 1964], pp. 86-87, 108). I assume that the amount of power used per employee was independent of the nature of the power used. Then, if the iron industry had been composed entirely of rolling mills, steam power would have been about 15 per cent of the total power used; if the industry had been only blast furnaces, about 30 per cent. As employment was probably somewhat lower in rolling mills than in blast furnaces, the ratio for the industry as a whole was near 25 per cent. (Less wrought iron than pig iron was produced at this time, and output per employee was similar in the two branches of the industry. See Temin, pp. 25-28, 86-87, 108.)

As the amount of power used per employee varied in the cotton industry according to the type of power used, there was a divergence between the proportion of power used that was generated from steam (about 10 per cent) and the proportion of the industry's value added that was produced in steam-wowered plants (about 15 per cent). The 25 per cent fire for the iron industry is te proportion of employees who worked in steam-powered plans; I have assumed this was equal to the proportion of the industry's power derived from steam.

202 Peter Temin

were increasingly using mineral fuel, and blast furnaces (at least in the East) were about to follow suit. Ironworks began to be located near coal mines, away from the headwaters of streams. In the years after 1840, also, the industry continued its westward migration into a region of high interest rates. The lessening of the locational con- straint of charcoal, the "migration" toward coal, and the increasingly high interest rates the industry had to pay encouraged the transition from water to steam power.35

The food-products industry was composed mainly of sugar mills and flour and grist mills. Of these, sugar mills used the greater amount of steam power in 1838.30 Located almost exclusively in Louisiana, sugar mills began using steam power in 1822 with en- gines imported from England. American engine builders in Tennes- see and Ohio then began to supply engines (for about half the price of the British engines), and the use of steam spread. As much as three fourths of the sugarcane grown in Louisiana in 1833 may have been ground by steam.

In the iron industry, technical characteristics of production dis- couraged the use of steam power by reducing the transportation charges incurred by using waterpower. For sugar mills, the cost of transporting the sugarcane to a waterpower site to be crushed was prohibitive, and waterpower was ruled out altogether. Sugarcane was grown in southern Louisiana where the land was too flat to pro- vide suitable waterpower sites. Since the cane had to be crushed immediately after being cut (otherwise the juice in the stalk fer- mented and was ruined) it could not be transported to a distant mill to be crushed, nor could it withstand delays due to loss of power. Wind power was ruled out due to its unreliability, and the choice was between animal and steam power. While adequate cost comparisons do not seem to be available, the quotation from Oliver Evans that heads this paper indicates that there was reason for preferring steam.38

35 See Temin, Part I. By 1869, the iron industry used a far higher proportion of steam power than the cotton industry (Fenichel, Table B-13).

36 The west-south-central region used power primarily for sugar mills in 1838. This region accounted for 7,800 horsepower, while the horsepower allocated to the food- products sector as a whole was only 9,800. The estimate in the text is thus very conservative (Fenichel, tables A-1, A-2).

37 De Bow's Review, I (1846), 53-55; B. Silliman, Manual on the Cultivation of the Sugar Cane (Washington, 1833), pp. 31, 46.

38 George R. Porter, The Nature and Properties of Sugar Cane (London, 1830), pp. 172-73; Reynold M. Wil, Steam Power on the American Farm (Philadelphia: University of Pennsylvania Press, 1953), p. 6.

Steam and Waterpower 203 Less than one third of the flour and grist mills operating in 1869

used steam power, and we may presume that the proportion in 1838 was smaller.39 The large steam power consumption of the food- products industry in 1838 was then a result of the preference for steam in sugar mills and the large total power requirements for flour and grist mills. Too little is known about the costs of flour milling before the Civil War to justify any conclusion about the source of power in this industry. It is interesting to note, however, that Oliver Evans was a millwright and that his innovations in flour- milling machinery-which amounted to the introduction of a form of automatic production-were at least as well known as his in- vention of the high-pressure steam engine. He opened a demon- stration steam-powered flour mill in Pittsburgh in 1809 to publicize the use of his steam engine for flour milling. The mill does not seem to have been profitable nor to have encouraged others to imitate it; reissues of Evans' guide to the use of his flour-milling machinery continued to talk exclusively in terms of waterpower up to the Civil War.40 The causes for this sequence of events are not clear, and the question about the rationality of flour millers remains moot.

Sawmills were the largest single user of steam power in 1838. While this undoubtedly resulted in large part from the large total power needs of sawmills, it also owed something to their location at this time. Over one third of the sawmills using steam power were located in the lower Mississippi Valley where the opportuni- ties to use waterpower were severely limited.4' Other sawmills were scattered in location and subjected to offsetting influences. Logs were presumably floated down rivers to the mills, and there would have been little or no extra cost in locating the mill near a water- fall if one was available. On the other hand, sawmills in scattered locations must have paid high rates of interest, which would have encouraged the use of steam. Without being able to quantify the

39 Herman Hollerith, "The Statistics of Power Used in Manufactures" in Tenth Census of the United States, II, Manufactures (Washington, 1883), 496.

40 Bathe, pp. 159-67; Oliver Evans, Young Millwright and Miller's Guide (Phila- delphia, 1860 edition); Charles Byron Kuhlman, The Development of the Flour- Milling Industry in the United States (Boston: Houghton Mifflin, 1929), pp. 80-81, 96. The parallel between the Pittsburgh Steam Mill and the Albion Steam Corn Mill, built in London by Boulton and Watt in 1786, is quite good. See John Lord, Capital and Steampower, 1750-1800 (London: P. S. King & Son, 1923), pp. 131, 162-66.

41 This includes Fenichel's large estimated use of steam power for lumber products in this region.

204 Peter Temin influence of these factors, it can only be said that the use of steam in sawmills indicates that innovations were not being ignored even in the industries of the backwoods.

Finally, the group of light steam-power users lumped together in Table 5 is too diverse to permit much generalization. For these industries, little power of any sort was needed, and steam power was used in small units when it was used.42 The industries were largely urban in character-a characteristic notably lacking in most of the processing industries discussed so far-and their use of steam appears to have been a response to this environment.

What can we conclude from this discussion of the demand for steam power? Although steam power was used widely in manufac- turing by 1840, most of its use was concentrated in a few industries and it provided the main power supply for almost none. The direct costs of steam power were higher than the costs for waterpower, and industries used steam only when the freedom of location gained by using steam was large. In other words, in the years before it became important as a supplier of land transportation, the steam engine functioned as a substitute for such transportation, allowing power to be brought to the raw materials when it was expensive to bring the materials to waterpower sites.43

It has been asserted often that American technology was "labor saving."" Americans, in other words, are said to have used larger amounts of capital per worker than their European counterparts. The steam engine was not a labor-saving innovation in this sense, since its use involved a lower ratio of capital costs to labor costs than the use of waterpower, and the costs of producing its fuel- cutting wood and mining coal-were primarily labor costs. Yet there is no evidence that the steam engine was neglected. Indeed,

42 The average size of steam engines in this group was under 10 horsepower, com- pared to an average of about 20 for all manufacturing and over 100 for iron rolling mills. The industries in this group included-in order of the amount of steam power they used in 1838-foundries and machine shops, leather and tanning, paper and publishing, grinding white lead, etc. (Report on Steam Engines).

43 "Coal and steam, therefore, did not make the Industrial Revolution; but they permitted its extraordinary development and diffusion." David S. Landes, "Technical Change and Development in Western Europe, 1750-1914," in The Cambridge Eco- nomic History of Europe, VI, Part I (Cambridge, Engl.: The University Press, 195), 329.

44 For a recent statement, see H. J. Habakkuk, American and British Technology in the Nineteenth Century (Cambridge, Engl.: The University Press, 1962). For a critical discussion, see Peter Temin, 'Labor Scarcity and the Problem of American Industrial Efficiency in the 1850's," forthcoming.

Steam and Waterpower 205 the relatively high interest rates west of the Allegheny Mountains presumably encouraged its adoption. If the assertion about Ameri- can technology means that Americans saved labor under all cir- cumstances, it is not supported by the evidence on the demand for steam engines. If the assertion means that the relative costs of labor and capital discouraged the use of "capital-saving" innovations, such as the steam engine, it is not supported by the data on interest rates in America45 and the response of the demand for steam engines to high rates.

Examination of the diffusion of the steam engine shows the limi- tations of our knowledge of the spread of innovations in the early nineteenth century. We know only the grossest characteristics of the diffusion process and even less about the relative costs of differ- ent production methods in particular industries. To the extent that our knowledge extends, the market appears to have worked well, although the characteristics of the market for steam engines differ from those usually ascribed to "the American market." Local rather than national markets were of primary importance, and pressure to favor labor-saving over capital-saving innovations is not evident.

PETER TEMIN, Massachusetts Institute of Technology

45 Sidney Homer, A History of Interest Rates (New Brunswick, N.J.: Rutgers University Press, 1963), pp. 195-96, 286-87. Interest rates in the eastern United States were higher than those in Britain, and interest rates in the western United States were higher than those in the East.