Economic Change + Development Flashcards
1
Q
net importer to net exporter
A
- by the early 1890s, the us was still a net importer - this changed after the ‘Second Industrial Revolution’
- 1895 - 1913 the economy achieved ‘take off’ - two intense surges in American manufactured exports
- first an increase of 90% between 1895 + 1900
- then 77% 1908-1913
- by 1913 US was a net exporter
2
Q
Examples of US exports
A
- iron - discovery of high-grade iron ore in the Messabe range of hills in Minnesota 1892
- steel - went up by 400% in 1913 - US steel
- oil - 1910 US oil production equalled that of the rest of the world combined
3
Q
What caused the second Industrial Revolution?
A
- efficiency = US industries had higher productivity through technological advances
- influx of immigration
- vast natural resources
- favourable political circumstances - limited regulation of businesses due to long period of Republican dominance from 1896 to 1912
4
Q
Discovery of new oil fields
A
- huge new oilfields in Oklahoma, California + Texas expanded the position of US as the worlds leading oil producer
5
Q
Developments of agriculture
A
- the rural economy remained highly significant in the US
- world leader in the production of wheat, corn + other grains
- US produced 25% of world’s wheat supply by 1900
- cotton was still the foundation of the economy in the south - King Cotton - forming 19.2% of US exports in 1900
6
Q
Problems with agriculture
A
- 1893 Panic intensified problems in the agriculture
- small farmers in south + west facing economic problems with falling prices + a shortage of credit
- agricultural economy became reliant on railroads + the wider commercial network it bought with it
- dependent on railroad companies + banks in order to invest in seed, livestock etc. = making them vulnerable to market changes
7
Q
Agriculture in the south
A
- tobacco, sugar + cotton still provided the basis of southern economy
- the promises to empower black farmers was not fulfilled - most remained trapped in sharecropping
- small white farmers were only a little better off - struggling to raise finances needed to invest in improved methods
8
Q
End of ‘easy credit’
A
- the success of early years was fuelled by readily available ‘easy credit’ - loans from banks + land companies that were based on unrealistic expectations that farmers would be able to pay them
- credit boom subsided = small farmers deep in debt
- the swell of protests from western + southern farmers lead to the rise of populism
9
Q
‘Golden age’ of agriculture
A
- after 1900 there was dramatic improvements in the situation for American farmers - expanding domestic economy boosted the demand for agricultural production
- exports increased, modernisation + mechanisation spread more widely
- boosted by outbreak of WWI in 1914
- Reclamation Act 1902 = irrigation schemes in arid areas
- Federal Farm Loan Act 1916
10
Q
Impact of economic change
A
- rapid urbanisation = population of NYC doubled from 1890 to 1910
- regional differences
- rise of big businesses
11
Q
Southern economy
A
- development of oil industry in Texas + Louisiana
- continued to be dominated by plantation products - above all King Cotton
- urbanisation moved more slowly + on a smaller scale than industrial northeast
12
Q
Western economy
A
- distant + isolated
- dominated by extractive industries - subject to booms + busts
- heavily dependent on eastern financial interests for investment
- late 1890s Alaska-Yukon Gold Rush - stimulated rapid development of pacific coast ports - Seattle + San Francisco - sparking interest in the west
- war against Spain + increasing trade with China also boosted west coast ports - San Francisco became an important centre for shipbuilding
13
Q
What made economic change not smooth or continuous?
A
- extensive pockets of poverty in many big cities
- industrial unrest = industrial workers responded to low wages + harsh conditions by organising trade unions + resorting to strike action
- two major financial crises - Panics of 1893 + 1907
14
Q
Strikes
A
- At Homestead in Pennsylvania 1892 = 13 steelworkers were killed in a pitched battle against strike-breakers brought in by the Carnegie Steel company
- Pullman Strike 1894 - widespread railroad strike that disrupted traffic in the Midwest - first time federal govt. used an injunction to break strike (Cleveland pres.)
- Pullman strike happened due to a 25% cut on already low wages due to the depression from 1893
15
Q
Impact of Panic of 1893
A
- slowed down the railroad boom = sudden bankruptcy of the Philadelphia + Reading Railroad
- gold reserves were already falling before 1893 + the money supply was insufficient to finance the scale of economic activity
- stock market collapsed + hundreds of banks failed
- general economic slump that lasted three years
16
Q
Cause of panic of 1907
A
- was a period of relatively slow growth in between the surges of 1895-1900 + 1908-1913 + the banking system was struggling to keep pace with expansion of industry
- triggered by the crash of the third largest trust in New York - Knickerbocker Trust Company
17
Q
Impact of 1907 panic
A
- at the time there was no central bank to prop up the banking system
- things would have spiralled out of control without the intervention of JP Morgan who put up millions of dollars to restore business confidence + prompted other financiers to do the same
- unlike the panic of 1893 it was over pretty quick
- but it was a warning sign of the weakness of regulations of the banks + the power big financiers held over the govt.
18
Q
Impact of WWI
A
-large spending on war supplies by Britain + allies stimulated rapid growth in American industry + agriculture
- firms such as US steel + Baldwin Locomotive Company expanded production to full capacity
- Baldwin produced 5500 military locomotives + 6 million artillery shells for the Allies 1914-1918
19
Q
Economic impact of immigration
A
- many were economic migrants drawn to the US by promise of work + better life
- provided a vast pool of labour + huge number of domestic consumers to fuel the economic boom
- most of the migrants became urban dwellers - population explosion in American cities
20
Q
Opposition to Big Business by 1890
A
- granger movement
- knights of labour - nationwide trade union movement with more than 10,000 followers by the 1880s
- interstate commerce act 1887 - set up to investigate + regulate railroad companies
- Sherman anti-trust act passed in 1890
21
Q
Who were the ‘wealthy criminal class’
A
- often said 20 men controlled American industry + finance through corporate trusts + monopolies
- the riches of the business elite made them easy targets by progressives -
- Rockefeller - standard oil = 200 mil, he became world’s first billion air in 1913
- Andrew Carnegie - sold his steel empire for 480 mil in 1901
