Economy (1890-1920) Flashcards
5
Describe the causes of economic growth 1890-1920
- 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
5
Describe the take-off of American exports 1895-1913
- 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
7
Describe industrial growth 1890-1920
- 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
Describe the growth of iron production 1890-1920
- 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
3
Describe modern oil production
- 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
4
Describe the continued development of trusts and monopolies 1890-1920
- 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
4
Describe the favourable political climate for industrialisation 1890-1920
- 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
6
Describe the Depression of 1893
- 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
4
Describe the social and economic effects of the 1893 Depression
- 15k businesses folded
- 600 banks closed
- unemployment climbed to 20% (43% in Michigan)
- soup kitchens opened to aid poor
2
Describe the political and structural effects of the 1893 Depression
- Upsurge in business consolidations in response to bankruptcies
- Led to support of populism/progressivism
4
Describe how Cleveland responded to the 1893 Depression
- 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
3
Describe the Sherman SIlver Purchase Act 1890
- doubled US purchase of silver
- undermined US gold reserves
- lead cause of Depression
4
Describe the Panic of 1907
- 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)
4
Describe how the 1907 Panic was ended
- 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
2
Describe the political effects of the 1907 Panic
- Demonstrated underlying weakness of unregulated banking system
- Support of central banking - Federal Reserve established 1913
2
Describe how the agricultural sector remained important 1890-1920
- US still leading producer of wheat and corn despite industrialisation
- Cotton still foundation of economy in South
6
Describe the 1890s Agricultural Discontent
- 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
3
Describe the agricultural hardships in the South in the 1890s
- 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
3
Describe how the 1893-97 Depression intensified agricultural discontent
- 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
4
Describe the political effects of the 1890s Agricultural Discontent
- 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
5
Describe the ‘Golden Age’ of agriculture
- 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
4
Describe federal government support provided during the ‘Golden Age’ of agriculture
- 1902 Reclamation Act - irrigation scheme in arid (dry) areas
- 1906 Meat Inspection Act - regulated food quality
- 1916 Federal Farm Loan Act
- 1917 Vocational Education Act
3
Describe the impact of farmer income and price parity
- placed at same ‘buying power’ as general economy
- could therefore afford to cultivate greater land
- led to boom in wheat and corn output
4
Describe how WW1 enhanced the agricultural boom
- Greater demand for American produce
- Farmers able to purchase more land secure in knowledge their income would be greater guaranteed
- Food production inc from 12.3m to 18.6m tonnes per year (1915-1918)
- Farmer’s income grew by 30% (1915-1918)
2
Describe the limits to the impact of WW1 on the agricultural boom
- Demand fell once global markets recovered
- Much of new land bought was ‘sub-marginal’ - only made profits when demand and prices were exceptionally high
3
List the effects of economic change 1890-1920
- Immigration
- Urbanisation
- Industrial action
See social cards for first 2 points
3
Describe the causes of industrial action 1890-1920
- Panic of 1893 and 1907
- Intense pockets of poverty e.g. poor region of Appalachia
- Depression 1893 and low wages/harsh conditions
6
List 6 examples of industrial action 1890-1920
- Pittsburgh steelwork’s strike 1892
- Great Northern Railroad Strike 1893
- Pullman strike 1894
- Anthracite coal strike 1902
- Ludlow Massacre 1913
- 1919 strikes
6
Describe the Pittsburgh steelwork’s strike 1892
- Manager at Carnegie’s Homestead Steel Works plant, Henry Clay Frick, cut wages in 1892 and refused union negotiation
- Private detectives smuggled in ‘blackleg labour’ to break griphold of ‘Amalgamated Association of Iron and Steel Workers’
- Strikebreakers attacked by workers
- Company called in militia, armed with rifles and machine guns
- Action collapsed after 5 months without wages and ensuing starvation
- Defeat set back union power considerably
2
Describe the Great Northern Railroad Strike 1893
- Initiated by American Railway Union (ARU)
- forced railway bosses to make concessions
Who led the ARU?
Eugene Debs
4
Describe the Pullman Strike 1894
- Triggered by Pullman company’s decision to cut wages yet refuse to lower rents where employees were required to live
- ARU refused to handle any trains handling Pullman carts, including mail trains
- Caused national strike that paralysed railway system
- AFL opposed boycott as ARU was tying to seize its membership - internal divisions
4
Describe how Cleveland ended the Pullman Strike 1894
- Railway leaders asked President Cleveland for support
- Cleveland sent in troops to keep trains running
- Rioting led to troops firing onto crowds, killing 3
- Strikes gradually ended in failure with rents remaining at the same level
5
Describe the signficance of the Pullman Strike 1894
- Federal Govt had shown itself hostile to unions - to extent it was willing to shoot its own citizens
- Used Ombibus Indictment Act 1884 against ARU - permitted legal banning of strikes
- ARU dissolved
- Remained in force until 1930s
- Belief that Government sided with industrialists led to working class support for populism
3
Describe the Triangle Shirtwaist Factory Fire 1911
- Deadliest industrial disaster in NYC
- led to deaths of 123 women (as young as 14)
- Doors to stairwell and exit blocked to prevent workers taking unauthorised breaks
3
Describe the impact of the Triangle Shirtwaist Factory Fire 1911
- Muckraker journalism
- Led to legislation on factory safety standards
- Helped spur growth of ILGWU which fought for better working conditions for sweatshop workers
ILGWU - International Ladies’ Garment Workers’ Union
5
Describe the impact of WW1 on the economy (exports)
- USA went from debtor to creditor nation
- High demand for crops from Europe led to agricultural boom
- Britain and France depended on US for war supplies
- Total exports climbed from $2.3bn (1913) to $6.2bn (1917)
- By end of 1918, 3.5m rifles produced
4
Describe the impact of WW1 on the economy (employment)
- employment dropped from 16.4% (1914) to 6.3% (1916)
- reduction in immigration due to war
- recruitment to army
- increased in production → more jobs
2
How much did WW1 cost for the USA?
- $33.5bn
- $7bn loaned to allies
3
How did the USA pay for WW1?
- 22% through corporate taxes and levies on wealthy
- 20% through creation of new money (QE)
- 58% raised through ‘Liberty’ bonds
- A 25% inheritance tax introduced
What was the top level of income tax in WW1?
75%
2
Describe liberty bonds
- 5 war bonds issued across war
- by 3rd bond, 9m posters had been distributed, esp to women
3
Describe private business in WW1
- Baldwin produced 5.5k military locomotives and 6m artillery shells for allies
- US Steel expanded to full capacity
- JP Morgan made loans to French Bankers and BoE
4
Describe progressive labour relations in WW1
- Unions more powerful due to reduced labour force and need for high and consistent employment
- Samuel Gompers (AFL) appointed to Wilson’s Council of National Defence
- National War Labor Board
- War Labor Policies Board
3
Describe the National War Labor Board
- set up in April 1918 to settle industrial disputes
- consider over 1.2k cases
- dissolved in May 1919
3
Describe the War Labor Policies Board
- set wages and standards of employment
- wages doubled in steel industry
- consulted unions and employers - greater acceptance of unions
How much did union membership grow by in WW1?
2.3m
2
Describe regressive labour relations in WW1
- Women and AA still faced union resistance
- Communist Revolution in 1917 in Russia led to backlash against worker movement
4
Describe the 1919 strikes
- wave of national strikes involving over 4m workers
- Feb 1919 - general strike of 60k workers in Seattle
- Sept 1919, 75% of Boston police officers on strike
- ‘Great Steel Strike’ against US Steel lasted 3 months
3
Describe the US economic positives by 1920
- Produced 70% of world’s oil
- Overtook Germany as leading producer of fertilisers and chemicals
- Standard of living outshone European counterparts ravaged by war
2
Describe the US economic negatives by 1920
- Inequality persisted in urban areas
- Trade Union movement grew but still limited
2
Describe agriculture by 1920
- Midwest’s efficient, large-scale farms produced ⅓ of world’s wheat and ⅔ of its corn
- Small farmers faced competition from larger agricultural enterprises from Argentina, Canada, Australia and New Zealand
2
Describe the Dingley Tariff Act 1897
- raised tariffs in United States
- to counteract the Wilson–Gorman Tariff Act of 1894, which had lowered rates
3
Describe Labor Day
- Designated by Cleveland as national holiday following 1894 Pullman strike
- Won support from Gompers
- Contrasted more radical May Day movement
