The causes of this rapid industrial development are enumerated by the census report as five in number: the agricultural resources of the country, the mineral resources, the highly developed transportation facilities, the freedom of trade between states and territories, and the absence of inherited and over-conservative ideas We have already considered the wonderful agricultural and mineral resources of the country, and have seen how greatly the American people are indebted for their industrial prosperity to the bounty of nature. The 31 magnificent system of inland waterways, comprising over 18,000 miles of navigable rivers, and the railroad system, with over 200,000 miles of track, facilitate a rapid and cheap exchange of products. The enormous domestic market afforded the American manufacturer, larger in consuming capacity than that in any other country in the world, has permitted the economic production of goods on a large scale and a consequent reduction in cost. Foreigners have often asked the question why, if freedom from tariffs and trade restraints has been a good thing within the United States, freedom of trade with other countries would not prove equally advantageous. In answer to this, James G. Blaine, formerly Secretary of State, wrote, “It is the enjoyment of free trade and protection at the same time which has contributed to the unexampled development and marvelous prosperity of the United States.” Finally, the absence of tradition and of over-conservative ideas handed down from a former and more primitive system of industry has been a great boon. There have been developed traits of energy, inventiveness, and ingenuity, which, aided by a universal system of compulsory free education, have contributed greatly to the material progress of the people.
The system under which the production of wealth in a modern industrial nation is carried on is usually called the factory system, and to this we must now turn, for it is in the factory that the utilization of machinery and capital finds its greatest development. The term is not easily defined, but we may adopt the description given by the late Carroll D. Wright: “A factory is an establishment where several workmen are collected for the purpose of obtaining greater and cheaper conveniences of labor than they could procure in their own homes, for producing results by their combined efforts which they could not accomplish separately, and for preventing the loss occasioned by carrying articles from place to place during the several necessary 32 processes to complete their manufacture.” The essential elements in such a system are the minute division of labor, the large use of labor-saving machinery, the increasing specialization and localization of industry, and the concentration of production in fewer and larger establishments with consequent increase of product and reduction of cost.