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The use of steam power in manufacturing has long been recognized as an important part of the English industrial revolution, but in studies of the United States the role of the steam engine in manufacturing has been overshadowed by its application in railroads. This paper attempts partially to redress the balance by examining the use of stationary steam engines in America about 1840. Section I explores the characteristics of the supply of stationary engines in America, contrasting the engines used in America with those used in Britain. Section II discusses the demand for steam engines, that is, the factors underlying the choice between steam and waterpower in different industries.