Museum of American Finance
Erie Railway Company stock certificate signed by Jay Gould, 1869.
British were impressed with several American inventions— such as Cyrus McCormick’ s mechanical reaper and Samuel Colt’ s revolver— but they overlooked the radical advancements in the manufacturing process that produced them. The Americans had quietly achieved the holy grail of manufacturing by creating machinery and processes that enabled manufacturers to produce machine-made products with fully interchangeable parts.
Prior to the Great Exhibition of 1851, the world was largely unaware of American advancements in precision manufacturing. After the exhibition, the innovations were collectively referred to as the“ American System of Manufactures.” Soon thereafter America became the leading innovator in manufacturing technology, and the American System of Manufactures became the cornerstone of the growth of US manufacturing in the Gilded Age.
In contrast to Americans, European industrialists expressed a bias toward manufacturing products at a relatively small scale and with a higher degree of customization. This philosophical difference enabled the US manufacturing sector to prevail over foreign competitors and accelerate the nation’ s transition from a proto-industrial economy into a mass production industrial economy.
Natural Resource Extraction
The sheer volume of natural resources scattered throughout the United States is often underappreciated. Successful extraction— especially during the late 1800s— was a major contributor to America’ s cost advantage in industrial production. Cheap energy in the form of coal and petroleum enabled manufacturers to reduce operating and transportation costs. The discovery of rich and easily accessible iron ore deposits provided cheap input for steel producers. Noteworthy discoveries included iron ore deposits in the Mesabi range in Minnesota; crude oil in Titusville, Pennsylvania; and multiple coal discoveries throughout the land. Extraction of these resources provided industry with inexpensive inputs to the manufacturing process and facilitated affordable transportation of finished goods to end market.
Transportation and Communication
“ The fact that railroads had so irrationally spread themselves over the empty plains, in stark defiance of every tenet of conventional economics and common sense, was a major factor in the explosive rate of American growth.”
— Charles Morris, author of Tycoons
Ironically, the same speculative excesses that plagued Gilded Age finance produced
www. MoAF. org | Winter 2026 | FINANCIAL HISTORY 13