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A mill town is an American community developed by a corporation to house the workers employed in its nearby industrial plant. All of the various mill towns share several basic features. They are created almost entirely at the initiative of the corporation, for the purpose of developing a viable living and working environment meant to lure laborers to the factories and keep them there. Mill towns are not intended to be temporary settlements; they include all of the necessities of social reproduction. Finally, the corporation dominates not only the economic life but also the social, political, and religious lives of the citizens through work regulations.

The earliest mill towns were the English textile villages of Belper and Cromford, built in the late eighteenth century to house entire families of mill workers. These early villages, while providing housing near factories in isolated river valleys, had difficulty attracting suitable labor and maintaining communications and market connections. The introduction of the steam engine soon allowed English industrialists to locate factories near existing towns where they could find workers, eliminating the need for mill towns.

In the United States, however, the mill town became a phenomenon unto itself. American industrialists built mill towns for both practical and ideological reasons. When they were first constructed in the early nineteenth century, American factories relied entirely on water-power. The need to locate mills near falling water led industrialists to choose rural settings for their projects. At the same time, however, they needed to attract far more workers than might inhabit any individual rural community. Like their British counterparts, the solution they devised was to build new communities to which workers could move. However, they needed to find a way to build mill towns that did not offend the independent spirit or upset the agrarian social patterns of potential workers and their families. Two groups of textile manufacturers pioneered the creation of mill towns and, in doing so, developed two different labor systems and accompanying architectural forms to address both the practical needs of the mills and the social needs of the workers.

Samuel Slater (1768–1835), an American industrialist born in Belper, England, introduced what historians have come to refer to as the “family system” in the 1820s. Slater built factories and towns that mimicked in layout and architecture the small New England towns from which he drew his workers. The family system was meant to give participants the sense that the values of agrarian life were being maintained, even as children went off to work in factories. At first, paternal authority was shared between Slater and the householders. Fathers worked in the towns' fields and collected the wages of their children, whom they sent to the factories. Eventually, whole families became dependent on mill work as factories began paying children directly, freeing them from their parents' control. By the 1840s and 1850s, American-born families began to leave Slater's towns and were replaced by greater numbers of Irish, German, and Canadian immigrant families in which men, women, and children would all work in the mills. These families lived in tenement-style buildings, which made no pretensions of preserving the agrarian look and feel of the communities.

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