Economy (1890-1920) Flashcards
1
Q
5
Describe the causes of economic growth 1890-1920
A
- Higher productivity - through innovation and efficient management methods (Ford doubled wages to $5 in 1914)
- Cheap labour supply - influx of immigrants
- Rising world demand
- Favourable political climate (even with Progressivism)
- Vast natural resources
2
Q
5
Describe the take-off of American exports 1895-1913
A
- 2 intense surges in manufactured exports: 90% (1895-1900) and 77% (1908-13)
- Net exporter by 1913
- Exports concentrated on iron, steel, copper and oil
- American productivity outstripped Britain’s, even though American exports were lower
- Dubbed ‘American Commercial Invasion’ in Europe
3
Q
7
Describe industrial growth 1890-1920
A
- Main driver of economic growth
- Particular areas of expansion were oil and steel
- Iron production rose
- Modern oil production
- Continued development of trusts and monopolies
- Aided by favourable political circumstances
- Exploited economic opportunites of favourable trading partners
4
Q
4
Describe the growth of iron production 1890-1920
A
- Rose from 9.3m tns (1890) to 10.3m tns (1900) to 11.3m tns (1910)
- Pittsburgh became highly-centralised centre of iron industry
- 38 steel plants along 42k of rivers
- US Steel formation 1901
5
Q
3
Describe modern oil production
A
- Began in Jan 1901
- 1901, Lucas Well in TX produced 100k barrels per day for 9 days though spindletop device
- Oklahoma leading oil producer by 1907 - produced 25% of nation’s oil in 1913
6
Q
4
Describe the continued development of trusts and monopolies 1890-1920
A
- by 1904, largest 4% of US companies produced 57% of total American industry
- 319 major consolidations between 1908-1912
- Dupont controlled 85% of nation’s electric power
- Carnegie Steel Corporation sold to JP Morgan in 1901 - formed US Steel and became world’s first $1bn company
7
Q
4
Describe the favourable political climate for industrialisation 1890-1920
A
- limited business regulation
- state and fed govts sympathetic to business interests
- TR apporoved TC&I takeover in 1907
- particularly true of Republican dominance from 1896-1912
8
Q
6
Describe the Depression of 1893
A
- Withdrawal of Argentinian and European investors caused run on gold held in Treasury
- Panic triggered when Reading Railroad declared bankruptcy
- ‘Industrial Black Friday’
- Sparked 4-year depression
- Worst depression hitherto
- Known as ‘Great Depression’ until 1929
9
Q
4
Describe the social and economic effects of the 1893 Depression
A
- 15k businesses folded
- 600 banks closed
- unemployment climbed to 20% (43% in Michigan)
- soup kitchens opened to aid poor
10
Q
2
Describe the political and structural effects of the 1893 Depression
A
- Upsurge in business consolidations in response to bankruptcies
- Led to support of populism/progressivism
11
Q
4
Describe how Cleveland responded to the 1893 Depression
A
- Supportive of traditional economic beliefs of Gold Standard, business cycle, limited intervemtion
- Oct 1893, Cleveland persuaded enough members of Congress to pass Repeal of Silver Purchase Act
- Boosted business confidence and gradually stemmed unemployment
- 1895, JP Morgan lent $62m to prop up Gold Reserves
12
Q
3
Describe the Sherman SIlver Purchase Act 1890
A
- doubled US purchase of silver
- undermined US gold reserves
- lead cause of Depression
13
Q
4
Describe the Panic of 1907
A
- Triggered by collapse of 3rd largest NY trust, the ‘Knickerbocker’ trust company
- NYSE fell by 50%
- Local and national banks went under - no central bank at time to prop up banking system
- Interrupted boom period of 1895-1913 (though 1900-07 period one of slower growth)
14
Q
4
Describe how the 1907 Panic was ended
A
- TR authorised JP Morgan takeover to avert TC&I (Tennesseee Coal, Iron and Railroad Company) collapse
- JP Morgan’s actions prompted other financers to provide millions to restore business confidence
- Panic quickly overcome (unlike 1893 or 1929)
- Yet demonstrated that real economic power laid with robber barons
15
Q
2
Describe the political effects of the 1907 Panic
A
- Demonstrated underlying weakness of unregulated banking system
- Support of central banking - Federal Reserve established 1913
16
Q
2
Describe how the agricultural sector remained important 1890-1920
A
- US still leading producer of wheat and corn despite industrialisation
- Cotton still foundation of economy in South
17
Q
6
Describe the 1890s Agricultural Discontent
A
- Farming had become a part of a more integrated commercial network through railroads
- Made agricultural economy subject to wider market volatility, esp in South
- Shortage of credit in South and West
- New settlers in Trans-Mississippi West struggled due to conditions
- ‘Great Plains’ became known as ‘Great American Desert’
- Credit-fuelled early land rushes saddled farmers with huge debts
18
Q
3
Describe the agricultural hardships in the South in the 1890s
A
- Tobacco, Sugar, Cotton underpinned economy
- most black farmers remained sharecroppers
- white farmers rarely better off - struggled to raise finance to invest in new methods against Big Agriculture
19
Q
3
Describe how the 1893-97 Depression intensified agricultural discontent
A
- Reliance on loans
- Falling food prices accompanied with higher prices for grain storage and transportation caused by the surge of consolidation
- Provided less income to repay loans
20
Q
4
Describe the political effects of the 1890s Agricultural Discontent
A
- Rise in populism
- Many farmers lay blame at railroads and bankers
- Bimetallism won popularity as way to repay loans
- Farmers Alliance support developed into support for Weaver in 1892 and Bryan in 1896
21
Q
5
Describe the ‘Golden Age’ of agriculture
A
- Dramatic increase in production after 1900 due to increased global and domestic demand
- Farmer cooperatives permitted mechanisation to spread more widely
- Federal Government provided support
- Parity between farmer incomes and prices from 1905
- Boom enhanced by WW1
