Economic growth and the rise of corporations: railway, oil, developments in agriculture, urbanisation (1865-90) Flashcards
Impact of the Civil War on industrial Growth
Stimulated demand for manufactured goods, as the army needed guns, clothing and transport. Mass production and methods of distribution had to be developed.
Financial infrastructure to stimulate economic growth. The government had to raise money to pay for the war and this lead to development of a capital-raising system.
Introduced paper currency.
Introduction of tariffs ensured necessary protection for US-produced goods and reduced competition from already industralised nations like Great Britain.
Availability of lands impact on economic growth.
Westward settlement stimulated growth as it created markets for manufactured goods and encouraged further railroad development.
Land was very fertile and led to mass production of wheat, ensuring there was plenty of food, especially the growing industrial cities.
Greater demand for food encouraged greater mechanisation in agriculture which, in turn, led to increased demand for manufactured goods.
Population growths impact on growth of economy
Source of cheap labour (1860= 31.5 million but 1880= 50 million)
Increased incomes meant better food and housing and public health and medical knowledge, which resulted in lower death rates.
Immigration made up cheap labour force and they were consumers
Impact of transport on economic growth
Railroads meant there was a fast and efficient way of transporting raw materials but also distributing finished goods as well as cattle.
Railroads employed thousands of workers who were also consumers.
Encouraged demands as railroads required steel and coal.
Competition pushed down prices and led to technological improvements to improve quality.
Rail centres needed roads to distribute to outlaying areas and this stimulated further economic growth.
Role of government in simulating economic growth
Federal government did not really manage the economy, so businessmen had substantial freedom in running enterprises. No laws restricting hours of labour and no taxes on profits.
Congress happy to impose protective tariffs to ensure that foreign-manufactured goods were more expensive than home-produced goods.
Businesses also did not have to deal with trade unions. In disputes, employers were often supported by state and federal authorities who would use troops to deal wit workers’ demands for better pay or shorter working hours.
Impact of corporations and trusts on economic growth.
Corporations could own a number of businesses and could hire the management it wanted. It could buy, sell and own property to take over more companies.
Trusts emerged to avoid state laws on owning shares in more than one state or company. Rockefeller used this to build the Standard Oil Company to dominate US oil and he became the first American billionaire.
