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The two main systems used in the New England textile industry were the "putting-out system" and the "factory system." The putting-out system involved distributing raw materials to rural workers who would produce finished goods at home, allowing for flexible labor and lower overhead costs. In contrast, the factory system centralized production in large mills, employing workers on-site and utilizing mechanized equipment for greater efficiency and output. This shift to factory production marked a significant change in labor dynamics and industrial organization.

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