THE PIONEERS OF AMERICAN INDUSTRY 35 



as Australia and Argentina have relied upon the same sources 

 in later times. A large number of the public works were 

 planned with this prospect clearly in view, and would not 

 have been undertaken without it. Events proved that the 

 works could not be carried on after foreign capital ceased to 

 be lent freely to them. When the market for American 

 securities in London failed towards the end of 1839, work on 

 public improvements in most of the states was checked, and 

 ceased altogether in several of the western states. The 

 Wabash & Erie canal in Indiana and the Illinois & Michi- 

 gan canal in Illinois were not completed until arrangement 

 was made with English capitalists some years later to supply 

 the funds. 



Such was the situation regarding the demand for capital 

 in this country, and the supply of it during the period we are 

 investigating. We come now to the question how far private 

 enterprise was able to deal with this situation. The means by 

 which the large masses of capital required by modern industry 

 are brought together, is the corporation ; and we have next to 

 examine the condition of corporations, and ascertain how far 

 they were able to perform the services required of them. 

 Private business corporations began to be created in this 

 country soon after the revolution; and their rise was un- 

 doubtedly due to the growth of industries which required 

 more capital than could be easily supplied by individuals or 

 partnerships. The industry in which they first appeared, 

 and in which for many years the most important ones were 

 to be found, was banking. Congress chartered the bank of 

 North America in 1781, and the next year Pennsylvania and 

 New York each granted it a charter. By 1791 most of the 

 states had chartered one or more banks, and the federal gov- 

 ernment the bank of the United States. Ten years later 

 there were eighty eight state banks, and in 1830, 330. Insur- 

 ance companies grew up about the same time, and became 

 very numerous as the commerce of the country expanded after 

 the outbreak of the European wars. There were twenty nine 

 companies in the city of New York in 1830, nineteen in Boston, 

 thirteen in Philadelphia, and six each in Baltimore and New 

 Orleans. When the people turned their attention to improv- 



