Mills collapsed for the very reasons that factories prospered. These small mills were dependent on water for their source of power. Growing 19th century factories moved to steam power. They didn’t move to steam because they weren’t located on major rail lines where coal could be readily imported.  Also, most mills were not large enough for this type of major transformation.

The small mills couldn’t compete with factories in larger cities which manufactured their product faster and cheaper, if not better than they could. The small, interior mill town that could not attract a railroad not only suffered from access to raw materials. It also was at a disadvantage transporting its products to markets. But the ultimate death knell for the water-powered mill was the sophisticated marketing practices that larger manufacturers and their profits could afford. Big companies opened retail stores to sell directly to their customers. Catalogue buying allowed shoppers to conduct their business through the mail, eliminating the need for peddlers. And advertising in newspapers signified that 19th century manufacturing had become a multi-faceted, big business

Another key to developing urban centers of manufacturing after the Civil War was immigration. Before 1850 immigrants were outwardly deterred from settling in Connecticut by property ownership restrictions. By the 1870s and 1880s, however, foreigners were seen as a cheap and abundant source of labor. Immigrants were drawn to large cities because many were ports or located on important transportation lines. Once there, unskilled factory jobs, usually in areas in or within walking distance of their neighborhoods, provided the necessary employment and security.