Economic growth 1890-1913 Flashcards
Possible exam question: “The rise in the economy 1890-1913 was due to an abundance of natural resources” Give 2 other possible factors
Political conditions
Globalisation
Explain how natural resources caused economic growth with 2 examples
When High Grade Iron Ore was discovered in Minnesota in 1892 by 1907 US Steel had brought up 75% of it and steel production had risen by 400% by 1913.
New oil fields were found in Oklahoma, Texas and California which led to American oil production equalling the rest of the world combined by 1910
How could you evaluate natural resources as a main factor in economic growth?
Natural resources are not enough, you needed improved productivity to increase output this dramatically. This was partially due electricity allowing factories to work through the night and techniques like mass production.
Also the country was much better connected due to electric powered ships improving transportation of ores.
How did political conditions aid economic growth? Give 2 examples
Government aided agriculture with legislation like the Reclamation of Land Act 1902 which irrigated land that had been arid in the 1890s causing issues for farmers. Also the Federal Farm Loan Act 1916 helped small farmers and sharecroppers to have access to loans when they were struggling against bonanza farms.
The Dingley Tariff Act 1897 signed by McKinley set tariff at a very high level encouraged the population to buy American goods not European ones. This was then reinforced by the Payne-Alldrich Tariff Act 1909 signed by Taft.
How can it be argued that political conditions weren’t that significant to economic growth?
Although it was a period of Republican dominance they were much more progressive and especially Roosevelt wasn’t entirely business friendly. He prosecuted 44 trusts under the Sherman anti-trust Act of 1890 and Taft prosecuted 80. Also Roosevelt created 53 new animal reserves and 5 new national parks with his Forest Service Chief Pinchot to stop the extraction of natural resources from those areas.
How did globalisation aid economic growth? Give 3 examples
Labour supply - The influx of immigrants especially from Europe hit a peak of 20 million between 1890-1920. This provided cheap and dispensable labour which improved productivity and allowed businesses to meet demand.
The new world economy - telegraph lines allowed greater communication between countries and shipping made transportation much easier. This access to other countries allowed the movement of labour and immigrants as well as the export of goods. Net exports were at 90% in 1895-1901.
Rising demand - Europe struggled to keep up with the demand for products and services and began to use American exports instead as they were cheaper. This was called the ‘American Commercial Invasion’ and from 1895-1900 exports increased by 90% then by 77% from 1908-1913.
How did the war create economic growth? + 3 examples
In 1914 they were in another economic recession and the war gave a boost. As the war was drawn out it drained European’s resources meaning demand was high.
So Carnegie steel and others could expand more: Baldwin locomotive company produced 550 locomotives and 6 million shells.
Agriculture expanded production as well as food was desperately needed
JP Morgan made deals with French bankers to become the sole underwriter of allied war bonds
Name the 3 consequences of economic growth 1890-1913
Trade Union revolts
Economic depression
Urbanisation
Give 2 examples of trade union revolts
Pittsburgh Steelworkers Strike 1892 - manager cut wages at Carnegie’s Homestead Steelworks and refused to negotiate - they went on strike for 5 months but the employers brought in ‘backleg labour’ or strike breakers which made it a failure due to lack of funds/food
Pullman Strike 1894 - First national US strike - the Pullman company cut wages so they went on strike supported by the American Railway Union who refused to carry Pullman cars. President Cleveland sent troops who ended up shooting 4 people - was a failure but sparked populism.
Give 2 examples of economic depression
Panic of 1893 - one of the worst ever - 15,000 companies and 600 bank close - 20% unemployment - Cleveland refused to admit it was a panic and instead natural boom and bust which led to populism and progressivism wanting greater regulation.
Panic of 1907 - less severe - triggered by collapse of Knickerbocker Trust company which led to 50% fall in stock exchange - slow growth - rescued not by government but by JP Morgan.
How did economic growth effect urbanisation in the north, South and West?
See social issues section.
