THE EARLY development of Kentucky was entirely agricultural, and at first only those trades incidental and necessary to farming received attention. Lumbering, mining, and manufacturing had to await the development of agriculture. Isolated from markets and sources of manufactured goods, farmers produced nearly everything consumed by their families, and each farm was largely a self-contained and self-supporting economic unit.
Sugar and hardware had to be imported from the beginning, and at first were paid for with pelts. When farm production began to exceed consumption, farmers sought means of exchanging their surplus products for the articles they had to buy. A system of country merchandising based upon exchange of products developed, and farming for the market began.
Prohibitive freight costs over the Appalachian Mountains made eastward shipment uneconomic for all except commodities of high value in proportion to bulk and weight. The Ohio and Mississippi Rivers, which border Kentucky for more than 700 miles, and tributaries of the Ohio that flow across and through the State, give Kentucky more miles of major navigable streams than any other State. With a mountain barrier to the east and a water route down the Ohio and Mississippi to New Orleans and the Gulf of Mexico, river transportation reached a high stage of development, especially after the coming of the steamboat. This profoundly affected agriculture, and partly accounts for the high rank of Kentucky as an agricultural State for approximately seventy-five years preceding the War between the States. In 1839 Kentucky was first in the production of hemp, second in the production of both corn and hogs (with Tennessee ranking first), fourth in the production of oats and rye, and one of the leading tobacco, wheat, and beef producing States. The influence of Kentucky farmers, represented in Congress by Henry Clay, contributed to the establishment of a protective tariff. Competition of imported fibers with hemp induced Kentucky farmers to endorse the policy of protection.