According to Amidon
While the modern short story was probably born in Germany in the early 19th century, with works by writers such as ETA Hoffmann and Heinrich von Kleist, the genre came into its own in the US over the next few decades. The honour of the first great American short story must go to Washington Irving, whose canonical The Legend of Sleepy Hollow was published in 1820.
It was in May 1842, however, that US pre-eminence was firmly established when Graham’s Magazine of Philadelphia published two pieces by the 33-year-old Edgar Allan Poe. The first was one of his “tales of ratiocination”, The Masque of the Red Death, whose intense narrative concentration and focus on the feverish workings of his protagonist’s inner psychology prefigured much of what was to come.
Quite true. Poe put his tanks (or dragoons, or whatever) on the castle lawns of all those authors of three-decker Gothic novels by showing all their favourite tropes worked better in condensed form. After Poe no US writer needed to feel guilty about writing something shorter than 20,000 words. And, as Amidon astutely points out, the US economy's clout meant that there were always publishers for short fiction willing to pay decent rates.