Why are mills located on rivers?
Historically mills were located on rivers because the saws, grinding stones or whatever other equipment the mill used was powered by a water wheel. The river would turn the wheel which would be connected through gears and drive belts/shafts.
Mills were mainly located in the North due to the fact that the mills needed a flowing water source to be powered. There were many streams and rivers, which could power mills, in the North. Another reason why mills were mainly in the North was because the South was all about agriculture and didn't want to waste money on mills when they could buy slaves for labor in the fields.
Usually it was because the rivers were used to transport materials and goods. Saw mills were very popular way back then and many cities grew around the mills because that was were the work was. They used the rivers to float the logs and ships to transport other things. Eventually railways were used in the same way, and then of course trucks.