The Civil War and the Industrial Revolution
When eleven slave states seceded in 1860-61, they left the federal government in the hands of the new Republican party. The Republicans were dedicated above all to ending slavery and preserving the Union, but many of them also advocated a revival of the Federalist and Whig system of national mercantilism, which sought to have the federal government shape economic development. While James Buchanan was still president, Congress (controlled by Republicans as southern Democratic states had seceded) enacted the protective Morrill tariff, a tax on imported goods that gave American products an advantage. Tariff rates became increasingly high as the Republicans controlled all of the government until 1875. Large-scale American industry grew up under this protection from foreign competition, and many small firms were able to survive because large ones felt less pressure to become more efficient. The vast Union war effort also fed industrial development.