US 9: Economic Change and Development Flashcards
1
Q
What are the factors that explain industrial growth during the years 1890-WW1, the rise of US dominance as an economic and industrial power.
A
- ‘American Commericial Invasion’
- 1907 Financial Panic
- Expansion of Industry
- Trusts and Monopolies
2
Q
‘American Commercial Invasion’
A
- ‘American Commercial Invasion’
- Big business = Cornelius & William Henry Vanderbilt, Andrew Carnegie, John D. Rockefeller laid foundations of business empires
- Mass immigration provided flexible supply of labour
- Clear that world industrial power but US was net importer of goods and finance + had to beat Britain during 1890 ‘2nd industrial revolution’
- 1895-1913, American economy achieved ‘take-off’ = 2 intense surges of exports (1st was increase 90% 1895-1900, 2nd was 77% 1908-1913) concentrated on iron, steel, copper, oil -> Europeans alarmed + called it ‘American Commercial Invasion’
3
Q
1907 Financial Panic
A
- 1907 Financial Panic
- 1907 = new financial panic during time of slow growth, triggered Knickerbocker Trust Company + New York Stock Exchange fell by 50%
- Intervention of JP Morgan saved it = showed weakness of regulation of banks + government reliance on financial powers
- Senator Aldrich of Rhode Island headed a commission to investigate possibility of establishing Federal Reserve central bank
4
Q
Expansion of Industry
A
- Expansion of Industry
- Expansion due to oil + steel, city of Pittsburg = centre of iron industry (38 steel plants along 42 km of navigable rivers)
- Iron production rose from 920,000 tons in 1860 to 10.3 million tons by 1900
- Modern oil production began in Jan 1901 with success of Lucas well in Spindlehop Texas = produced 70,000-110,000 barrels per day for 9 days being capped. More gushes discovered in SW, by 1907 Oklahoma was lead oil producer = 1912 25% nation’s oil
5
Q
Trusts and Monopolies
A
- Trusts and MonopoliesTrusts and monopolies continued to develop = 1904 largest 4% US companies produced 57% total industry of USA. 1898 and 1902, there were 319 major consolidations e.g. firm of Dupont controlled 85% nation’s electric power + carnegie steel corporation sold to JP Morgan 1901 and renamed US steel = world’s first billion dollar corporation
6
Q
What was the impact of the Depression of 1893?
A
- What was the impact of the Depression of 1893?
- Depression of 1893 sparked stock market crash which made the worst in American history so far
- 24 businesses failed per day in May when ‘Industrial Black Friday’
- Lasted 4 years which hit 15,000 companies and 600 banks => national unemployment rate hit 20%
- Unemployment rate in Pennsylvania hit 255, NY 35%
- Soup kitchens opened to feed destitute
- Pres. Cleveland among last of conservative democrats who supported limited fed gov + believed that business cycle was natural occurrence and shouldn’t be tampered with by politicians. Supported gold system + opposed many in party by calling for repeal of Silver Purchase Act 1893 => boost business confidence and stemmed unemployment
- Panic of 1893 and depression alienated people from economy and political process and rise of progressivism.
- Lasting impact until 1897 = response to failures was upsurge in business consolidations + poorer elements of society believed they had been ignored during hard times and left at mercy of trusts = encouraged rise of progressivism
7
Q
What was the ‘golden age’ of American agriculture? (4 factors to explain)
A
Farmers Alliances led to the Populist Party
Southern Economy and AA
Success was an Illusion
Developments and the Golden Age
8
Q
Farmers Alliances led to the Populist Party
A
- Farmers Alliances led to the Populist PartyFarmers in south and west didn’t share prosperity and expansion experienced by industry. They objected to power of bankers and corporations. Falling agricultural prices with higher prices meant less income for repaying loans and farmers blamed railroads and bankers for these problems. = joined farmers’ alliances creating unity for themselves through co-operation and mutual self-respect. Alliances led to populist party and support the democrats in election of 1896
9
Q
Southern Economy and AA
A
- Southern Economy and AA
- South economy was highly dependent on ‘big agriculture’ (sugar, tobacco, cotton)
- Promises to support black farmers was unfulfilled and they were trapped as ‘sharecroppers’
- More vulnerability by small farmers = rush of farm settlements in Trans-Mississippi West. In late 1880s and 1890s there was huge expansion of farm settlements in states like Missouri as ‘Great Plains’ became ‘Great American Desert’.
10
Q
Success was an Illusion
A
- Success was an Illusion
- Thousands new farms covered these territories established on marginal land but 2 factors ensured that success was illusion:
1. Banking and Credit: optimism of early land rush fuelled by readily available ‘easy credit’ - loans from banks + land companies that were based on unrealistic expectations of farmers’ ability to repay them. Farmers mired deep into debt and unable to access loans when needed = reason for protest + rise of populism
2. 2nd = climate was bad -> during period of high annual rainfall that made marginal land fertile and productive but this was an anomaly = left farmers vulnerable to drought and wind erosion = moved back east
- Thousands new farms covered these territories established on marginal land but 2 factors ensured that success was illusion:
11
Q
Developments and the Golden Age
A
- Developments and the Golden Age
- US was world leader in wheat, corn and other grains. Cotton was the foundation for the South
- Exports increased after 1900 and improvements for American farmers aided by modernisation and mechanisation
- Reclamation act 1902, helping irrigation schemes
- Meat inspection act 1906, regulate food quality
- Federal farm loan act 1916
- Vocational education act 1917
- ‘Parity’ in relationship between prices and incomes and dislocation of world markets from the warFrom 1905, there was
‘parity’ in relationship between agricultural prices and incomes putting
farmers at the same levels of ‘buying power’ as general economy. = enabled
large increases in land under cultivation = boom in wheat and cornGolden age enhanced
by outbreak of European war in 1914 which dislocated world markets + damaged
competitorsFarmers were able to
buy more land, secure in knowledge that they would receive good prices for
everything they could produce butboom was misleading
12
Q
Explain the TU and strikes
A
Labour unions represented different crafts set up in years following the civil war. In 1885, AFL supported labour unions and tried to bring better working conditions and better wages with main weapon being strike action. In 1886, there were 1400 strikes
13
Q
Pittsburgh Steelworkers’ strike of 1892
A
- Pittsburgh Steelworkers’ strike of 1892Carnegie’s homestead
steelworks plant manager, Henry Clay Frick, cut wages in 1892 and refused to
accept union negotiationAttempt to break
power of the union = Amalgamated Association of Iron and Steel Workers (priv.
detectives), were used to smuggle in strike-breakers attacked by strikers.
Company called in militia - 5 months without wages, strikers gave up
14
Q
Pullman Strike of 1894
A
- Pullman Strike of 1894First national
strike in USA, paralysed railway system. Pullman company cut wages but refused
to lower rents for houses. ARU run by Eugene Debs refused to handle any trains
carrying Pullman cars + railway owners asked Pres. Cleveland for support and
agreed to send in troops , rioting followed and killed 4 people, strike ended
in failure with rents remaining, fed gov seemed hostile to unions.- Omnibus indictment act used against ARU permitted legal banning of strikes and remained in force until 1930s = led to populist party
15
Q
Regional Differences
A
- Regional Differences
- SOUTH = urbanisation led to oil industry development in Texas and Louisiana = establishment of New Orleans but economy dominated by plantation products + ‘King Cotton’ so behind North
- WEST = economy distant and isolated, dominated by extractive industries, vulnerable to busts and booms + dependent on east for investment
