Retailers and Merchant Princes NEW
During the colonial and mercantile periods, American merchants were the driving factor of economic progress, the class which as a group accumulated most wealth and reinvested it into other fields, leading on the path towards the industrial revolution. Always driven by the prospect to enlarge their mercantile profits, the merchants of the early 19th century built ships and factories to supply their stores. Over time, these investments proved so profitable, that their patrons abandoned their stores to concentrate on shipping or manufacturing, leaving the retailing of their goods to other merchants, who operated on the smaller scale of their specialty or general dry goods stores.
Thus by 1850, America’s most prosperous merchants were either engaged in international trade or acting as auctioneers on a wholesale scale, whilst the scores of smaller merchants, although reasonably well-to-do, were hardly accumulating large fortunes by tending to their stores. But the tremendous growth of American cities, fuelled by immigration and the industrial revolution which took place during the Gilded Age, created the opportunity for retailers to participate in the race to great wealth. Larger stores featuring a wide range of products organized in departments appeared in New York and other large cities and through advertising and attractive prices, soon capitalized on the people’s increased purchasing power.
In New York, an early predecessor to the department stores was Jotham Smith’s large dry goods house at 223 Broadway, later the site of the Astor House. But the first great merchant prince who perfected the concept of offering a complete range of dry goods in a single store organized in departments, was Alexander Turney Stewart, an Irish immigrant who rose to become the third richest man in America by 1875. “Stewart’s Folly”, as his first oversized store was called when it opened in 1848, was such a success that he upped the ante in 1861, building the even larger “Cast Iron Palace” at the corner of Ninth Street and Broadway , where shoppers could find everything they sought in nineteen departments on eight
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