Nails have always been in demand. They were first hand-wrought by blacksmiths and were very hard to obtain. A blacksmith that produced only nails was called a "Nailer".
Nails were so scarce (and expensive) in pre-1850 America that people would burn dilapidated buildings just to sift the ashes for nails. They did so because pulling the nails would have damaged most of them. After the nails were recovered, a blacksmith could easily straighten any nails that had been bent during construction.
We still use the term "penny" when referring to a nail's size. It is believed that this term came into use in the early 1600's in England. The English monetary unit was the Pound Sterling (£) which was divided into Shillings and Pence. The cost of 100 nails in Pence in the 1600's is how we refer to nail sizes to this day.
The cut nail made its appearance in the mid-1700's. For example, Thomas Jefferson established a nail factory at his Monticello plantation as a way to increase his farm income. His nail factory made both hand-forged and cut nails. It would not be until the middle-1800's that cut nails began dominating the marketplace.
Cut nails are not actually "cut"--they are sheared from steel plate that is the thickness of the nail shank. Although routinely referred to as "square nails", the cutting machine tapers the nail shank as it is sheared from the steel plate. A second machine forms the head of a cut nail.
With the hand-forged nail, all four sides are tapered. With the cut nail, two sides are parallel because they represent the thickness of the plate they were sheared from.
Cut nails could be manufactured much faster than hand-forged nails. As the process was mechanized, the cost per nail was less. However, cut nail factories employed operators and attendants for each machine so the process was still labor-intensive. The noise in those mills was deafening as well. Cut nails had their heyday from about 1820 (development of the Type B nail) to 1910, the advent of the wire nail.
The term "dead as a doornail" refers to a nail whose tip was clenched back into the wood. This was a common was to fasten door and gate hindges to prevent the nails from working loose.
reference "Appalachican Blacksmiths Association"