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American History - Ben > Economy (1865-90) > Flashcards

Economy (1865-90) Flashcards

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1
Q

5

Describe the immediate social and economic impact of the CW

A
  • Southerners lost massive amounts of wealth as farm lands were destroyed in the war
  • The production of cash crops like tobacco and cotton decreased until 1879
  • South had to rebuild its previously slave-dependent labour system
  • All confederate bonds and currencies became worthless
  • All Southern banks failed, precipitating depression which accentuated North to South economic inequalities
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2
Q

8

List the different factors of economic growth during Reconstruction

A
  • Impact of Civil War
  • Availability of Land
  • Population growth
  • Transport
  • Availability of Capital
  • Role of Government
  • Technological improvements
  • Trusts
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3
Q

5

Describe the impact of the CW on economic growth during Reconstruction

A
  • Stimulated demand for guns, clothing and transport
  • Need to raise funds for war led to development of sophisticated capital-raising system based on Wall Street
  • Paper currency introduced
  • Banking system evolved with growing level of money in circulation
  • Higher tarrifs reduced foreign British competition, protected US industry and provided Government income
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4
Q

3

Describe how the availability of land contributed to economic growth during Reconstruction

A
  • Fertile land led to mass production of wheat (6m bushel exports in 1867, 102m in 1890)
  • Greater demand for food at home and abroad encouraged mechanisation of farming, which stimulated demand for manufactured goods
  • Westward expansion further increased agricultural production
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5
Q

5

Describe how population growth contributed to economic growth during Reconstruction

A
  • Increase in population from 31.5m in 1860 to 50m in 1880
  • Permitted by increased income, healthier food, better housing, public health, etc
  • 2.8m immigrants in 1870s from Europe and Asia
  • Expansion of cheap labour
  • Stimulated demand for coal, clothes and food
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6
Q

5

Describe how transport contributed to economic growth during Reconstruction

A
  • first transcontinental railroad in 1869 opened West to minng and ranching
  • NY to SF took 6 days rather than 6 months
  • Led to more efficient transfer of materials e.g. coal from West Virginia coalfields to factories of New England
  • Railroad track grew from 35k miles in 1865 to 200k in 1893
  • Stimulated growth of other industries (see card below)
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7
Q

4

Describe how transport expansion stimulated the growth of other industries

A
  • Stimulated growth of oil and steel industries to provide engines, vehicles and stations
  • Employed 1m by 1900
  • competition pushed down prices and facilitated technological improvements
  • roads needed next to rail centres
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8
Q

3

Describe how the availability of capital contributed to economic growth during Reconstruction

A
  • Highly-developed stock market (where profits invested to faciliate econ growth) provided capital for entrepreneurship
  • $6bn annual turnover on NYSE by 1865
  • 2nd largest money market in world by 1890
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9
Q

7

Describe how the role of the government contributed to economic growth during Reconstruction

A
  • Laissez-faire
  • No corporate taxation
  • No labour restrictions
  • Congress/state government dominated by business interest
  • Congress willing to impose high protective tarrifs - some duties as high as 50%
  • Trade unions weak, divided and had no relationship with Government
  • Employers supported by state and federal authorities during strikes
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10
Q

3

Describe how technological improvements contributed to economic growth during Reconstruction

A
  • Bessemer Converter process introduced to USA - first inexpensive industrial process for mass production of steel from molten pig iron
  • Made it cheaper to produce steel in USA than Britain
  • Carnegie kept prices low and re-invested in new manufacturing plants and equipment
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11
Q

4

Describe how corporations and trusts contributed to economic growth during Reconstruction

A
  • ‘Trustee’ appointed to oversee company in other state to bypass state laws preventing individuals owning shares in mutliple states/corporations
  • 3 employees acted as trustee for all stock and property company that it was legally unable to own outside home state
  • Monopolisation e.g. Cleveland Massacre 1872
  • Cartel agreement - formal agreement between competing companies to control supply or manipulate prices to maintain high profits
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12
Q

2

Outline examples of trustee agreements of Standard Oil

A
  • Henry Flagler appointed himself ‘trustee’ for Standard Oil
  • 1882, 9 trustees ran 41 companies in Standard Oil trust
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13
Q

5

Describe the cause of Panic and Depression of 1873

A
  • Poor banking system allowed local banks to keep their deposits in larger privately- banks, esp in NY
  • Led to foolish investments by NY banks
  • Jay Cooke and Company (principal investor in Northern Pacific Railroad) railroad speculator that went bankrupt
  • Stock market prices crashed
  • Economic reversal in Europe further accelerated depression
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14
Q

3

Describe the effects of the Panic and Depression of 1873

A
  • NYSE closed for 10 days and credit dried up
  • 1m labourers unemployed nationally (1/4 in NY) in winter 1873-74
  • Construction of new raillines declined from 7.5k miles annually in 1872 to 1.6k miles in 1874
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15
Q

7

List the positive effects of industrial growth from 1865-90

A
  • Creation of transport systems
  • Innovation e.g. Bessemer process
  • expansion of ‘white-collar’ jobs in admin and service industries
  • some opportunities for women to work in variety of jobs
  • geographical mobility of workers made them ready, as consumers, to accept standardised products and not rely on local goods
  • beginnings of black migration North
  • increasing wealth gave greater international political and economic power over other nations
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16
Q

4

List the negative effects of industrial growth from 1865-90

A
  • Social problems in cities
  • Big agri dominated smaller farmers and pioneers
  • creation of powerful and largely unregulated corporations and trusts, often using fraud and violence to achieve success
  • Growth of middle class which lobbied against poor housing, and the evils of drink and prostitution
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17
Q

3

Describe what happened to cities’ identity as a result of industrial growth 1865-90

A
  • manufacturing moved to cities post-CW rather than near power sources like coal - enabled by railroad system
  • Cities became identified by what they produced
  • e.g. Birmingham, Alabama manufactured steel
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18
Q

4

Describe the social problems faced by cities due to industrialisation 1865-90

A
  • Overcrowding e.g. tenement housing
  • cities unable to cope with health and sanitation demands
  • entrenched exloitation of corrupt local govt and Boss system
  • ethnic tension and gang violence
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19
Q

3

Describe the American economy by the 1880s

A
  • By 1880s, the economy was growing at annual rate of 3.8% and GDP almost doubled
  • Dominated by few individuals and corporations who adopted unscrupulous methods
  • Facilitated by laissez-faire approach
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20
Q

3

Describe the methods of robber barons

A
  • monopolised large industries through formation of trusts
  • exploited workers
  • engaged in unethical business practices
21
Q

4

List the 4 key robber barons

A
  • Vanderbilt - railroads
  • Carnegie - steel
  • Rockefeller - oil
  • JP Morgan - finance
22
Q

7

Describe Cornelius Vanderbilt

A
  • Alongside son, became most famous railroad tycoons
  • Worth $11m in 1862 - grew wealth with railroad industry boom
  • Bought out other railroad companies in 60s
  • Consolidated many in East, cutting operational costs
  • One of first to replace heavy iron railroads with more durable steel
  • Wealth reached $100m during boom years
  • Richest man in America when he died in 1877
23
Q

4

Describe William Vanderbilt

A
  • Inherited bulk of welath
  • Ruthless manipulation of capital
  • Brutal handling of strikes made him one of most unpopular men in USA
  • Richest man in world at time of 1885 death
24
Q

6

Describe Carnegie

A
  • Scottish immigrant
  • Used British-invented bessemer converters to make better and cheaper steel from iron.
  • When demand for rails declined he switched to bridges, machinery, wires, etc
  • Monopolised steel industry through vertical integration - controlled all process from extraction to making of finished products
  • Ensured lower prices
  • 1901 - sold his steel empire to the banker J.P Morgan for $480m
25
Q

4

Describe Carnegie’s philanthropy

A
  • Outlined in his collection of writings, The Gospel of Wealth 1889
  • donated to universities, hospitals, free libraries, parks, swimming baths and churches
  • Actions contradicted his exploitative business practices with low wages and demanding work hours
  • Seen as socialist by some business owners
26
Q

6

Describe Rockefeller

A
  • Studies of disorganised oil industry led him to envision its universal scale
  • Bought the first oil refinery in 1862
  • 1870, set up Standard Oil Company in Ohio
  • Cleveland Massacre 1872 - acquired 22/26 rival refineries
  • 1880s - Controlled 85% of all American oil production
  • 1913 - World’s first billionaire
27
Q

4

Describe Rockefeller’s business methods

A
  • Bought out rival competitors
  • Undercut rivals through cost-cutting measures
  • Made secret arrangements with railroads to prevent free and fair competion
  • Utilised fixed prices
28
Q

2

Describe Rockefeller’s philanthropy

A
  • $550 million
  • Given away to medicine, African-American educational institutions and the Baptist church
29
Q

5

Describe JP Morgan

A
  • Inherited $12m - but increased his fortune by his skills as a financier
  • 1871 - began his own private banking company
  • Major force behind M&A of time
  • 1901, merged 2 major steel companies into US Steel Corporation - first $1bn company in history
  • Monopolised railroad industry in 1890s following Interstate Commerce Act 1887
30
Q

2

Describe personal criticism of JP Morgan

A
  • Accused of flaunting wealth
  • Power and influence attracted a lot of media and government scrutiny
31
Q

3

Describe the background to trade unions

A
  • Before 1877, largely sporadic and localised
  • National Labor Union an exception
  • Emerged due to rapid industrialisatiom
32
Q

5

Describe the National Labor Union

A
  • Formed 1866
  • 77 delegates representing 60k workers gathered at Baltimore to launch national organisation
  • adopted platform of 8hr work day
  • Economic depression 1873 and resulting unemployment ended movement
  • had fallen from peak 300k in 1872 to 50k in 1877
33
Q

2

Describe the background to the National Railroad Strike 1877

A
  • 1877, the owners of the B&O (Baltimore and Ohio) Railroad announced a pay cut, the 4th in as many years
  • Workers walked off the job and were joined by other workers in coal and iron and steel industries
34
Q

6

Describe the events of the National Railroad Strike 1877

A
  • At hieght, strike supported by 100k workers
  • Mass of strikers attacked railroad yards
  • Burned trains and teared up tracks
  • Violence worst in Pittsburgh
  • Military force under Hayes’ direction ended month of disorder
  • Strikers destroyed $10m worth of property
35
Q

3

Describe the violence in Pittsburgh

A
  • 5k workers fought 650 federal troops
  • more than 500 cars, 104 locomotives and 39 buildings burnt
  • 25 killed in rioting crowd
36
Q

4

Describe the consequences of the National Railroad Strike 1877

A
  • Prospect of renewed social warfare frightened middle-class urbanites
  • Convinced workers to need to organise to withhold Government pressure and advance agenda through political activity
  • Unions grew rapidly in succeeding decade e.g. KoL
  • Conversely, business community resolved to suppress labour associations by any means necessary
37
Q

3

Describe the Knights of Labor

A
  • Founded 1869
  • Built comprehensive movement comprising workers of all races, genders, ethnicities and occupations
  • Broad aims
38
Q

4

Describe the aims of the Knights of Labor

A
  • Lobbied govt for 8 hour days and child labour restrictions
  • Also campaigned for initiatives and referendums
  • Sought to build more cooperative labour-management relations
  • Aimed for businesses ran by council of workers and for managers within genuinely democratic enterprises
39
Q

4

Describe the growth of the Knights of Labor

A
  • Grew rapidly in 1880s
  • 1885, Knights organised a walk out in sympathy after Wabash Railroad tried to break a local union
  • within days, entire southwest system in disarray and the company forced to negotiate with workers
  • spurred considerable growth: 100k members (1885) to 750k members (1886)
40
Q

5

Describe the decline of the Knights of Labor

A
  • Many members were only occasionally willing to walk out despite growth
  • 8hr day rally in Chicago’s Haymarket Rally 1886 turned violent
  • KoL were most vehemently condemned because of their size
  • Within a year of the riot, the Knights’ membership had been cut in half
  • Within a decade, they were almost extinct
41
Q

4

Describe the background to the Haymarket Bomb Affair 1886

A
  • May 1886, Strike at McCormick Harvester Works, Chicago
  • Pitched battle occurred between strikers (Irish faction-led Trade Union that had become inflitrated by radicals) and strikebreakers
  • Police fired into the crowd, killing 2
  • Black International organised rally in Haymarket Square, the centre of packing houses of lumbering yards in Chicago, the following evening

Black International - a revolutionary anarchist organisation set up in Chicago in 1881

42
Q

5

Describe the events of the Haymarket Bomb Affair 1886

A
  • mass meeting addressed by radical anarchists like August Spies and Samuel Fielding
  • individual threw a bomb at the on duty-policeman
  • 60 wounded, of which 7 were killed
  • Police retaliated and fired into the crowd; wounding over 100, killing 4 workers
  • 8 anarchists found guilty, 4 of which executed in 1887 (despite lack of tangible evidence)
43
Q

4

Describe the consequences of the Haymarket Bomb Affair 1886

A
  • Intense public hostility towards anarchists and trade unions
  • Led to substantial failure of 8hr movement of 1886
  • Of workers who took part in movement, only 15k retained earnings by the end of 1886
  • Increased xenophobia as many immigrants were trade unions members
44
Q

5

Describe the American Federation of Labor (AFL)

A
  • Founded 1886
  • Samuel Gompers elected president 1886-1924
  • Played a central role in labour movement following KoL’s downfall
  • Membership at more than 250k by 1892
  • Held policy to support unions in securing agreements by collective bargaining and only striking hard when this failed
45
Q

4

Describe the structure of the AFL

A
  • Coalition of different trade associations rather than single union
  • Recognised autonomy of member unions - executive council could not interfere in the internal affairs of members
  • Levied tax on member unions to create strike fund and maintain a secretariat
  • Formed central and state federations to promote labour legislation in cities and states

secretariat - permanent administrative department

46
Q

3

Describe limits of the AFL

A
  • Only accepted skilled white men, unlike KoL
  • Objectives comparatively weak - focussed largely on higher wages and shorter work days
  • foresaked larger political and social objectives of the Knights
47
Q

There was real wage growth of (…) between 1860-90

A

60%

48
Q

2

Describe the McKinley tariff Act 1890

A
  • raised taxes on most imported goods from 38% to 49.5%
    -while eliminating the tax on luxury items such as coffee, tea

American History - Ben (22 decks)

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