The United States has passed very rapidly through the process of development leading up to the factory system. Among the earliest settlers the housework system prevailed. Although there was some exchange with the Old World each family was thrown upon its own resources and was compelled to produce for the most part the things which it needed. The introduction of slavery and of the system of indentured servants was a preliminary step in the direction of the wage work system in which the free worker sold his labor to such customers as desired it. Then came the handicraft system, when skilled workmen sold the products of their labor, not the labor itself, to their customers whom they met face to face. This step was followed here as in Europe by the commission system, as the market was widened through improvements in methods of transportation and facilities for exchange. The development did not proceed regularly and uniformly in all parts of the country. But the various steps may all be recognized in a general view of the history of industry in this country.

In the northern states the time was ripe for the introduction of the factory system on a large scale in the early part of the nineteenth century. Owing to the disturbance to commerce caused by the Napoleonic wars and our war with England (1812-1816) we could no longer depend upon a supply of manufactured goods from Europe, and a great impetus was thus given to the development of factories in this country. After the war of 1812 protective duties were levied upon goods coming into this country and this tended to ward off European competition and gave our young industries a chance to develop. We had by that time definitely adopted the factory system in the North and with the later development of canals and railroad transportation, the factory-came to be a more important factor in the economic life of that section of the country. Steadily the factory system pushed its way westward. But the South on account of its predominating agricultural interests and its peculiar institution of slavery was slow to follow the lead of the North. In recent decades, however, it too is rapidly developing the factory system.