Industry grew most rapidly in the North, in large part because the Southern economy, with its investment in land, cotton, and slaves, was extremely profitable. Historians have estimated that the average yearly return to cotton plantation owners was approximately 10%, a nice return on one's investment in any environment. Therefore, relatively little Southern capital was invested in manufacturing. But in the Northern parts of the country, profits made from trade and commerce were poured into new ventures.
Steam power was critical to the expansion of the factory system as well as to the transportation industry, and both areas were remarkably receptive to technological change. In America, individual freedom encouraged resourcefulness and experimentation, business growth encouraged new techniques, and the chronic labor shortage encouraged the substitution of machinery. Even the British admired American inventiveness.
An example of Yankee inventiveness came in the ice industry. For generations people had been harvesting ice in the winter and trying to preserve it during the hot summer months. A couple of ingenious Yankees made a fortune by developing insulated containers to preserve ice that was harvested from lakes and ponds. They experimented with many different materials to find those with the best insulating properties. They also developed cutting machinery that could harvest ice in square blocks that would fit together tightly, making it easier to store for long periods. Their system was so effective that over 90% of stored ice, if untouched, would remain frozen over the summer. They even transported and sold ice in the Caribbean and in other hot climates as far away as Egypt and India.
In this thriving industrial environment invention begat further invention. Development of such things as cans and containers became important for storage and transportation of products. Gail Borden invented a process for preserving condensed milk in tin cans. Charles Goodyear developed a process to make rubber more flexible and durable. John Deere and Cyrus McCormick invented new farm machinery that helped develop the agricultural industry in wheat, corn and other staples. Samuel F. B. Morse's invention of the telegraph led to creation of commercial networks that carried messages across the United States. The telegraph became an important adjunct to the railroad industry.
Eli Whitney's cotton gin was an early mechanical device that changed cotton production in the South, but many other inventions moved industrialization forward. In 1800 the United States patent office approved 41 patents; by 1860 that figure had risen to 4,357, a one hundred-fold increase. Americans were willing to try anything; they started by copying designs of others and then improved them through innovations of their own. Automated flour mills, nail making machines and other mechanical devices appeared. Elias Howe and Isaac Singer developed a sewing machine, an important adjunct to the textile industry. The sewing machine actually retarded textile factories to some extent, as it made the production of garments in private homes more feasible.