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Period: Apr 2, 1498 to
Economic Issues
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Jun 7, 1498
The Columbian Exchange
After Christopher Columbus discovered America on Oct 12, 1492, New World and Old World started trading. Europeans wanted raw materials like gold and silver, and new crops like corn, potatoes, and tobacco. Old World instead was introduced wheat, sugar, rice, horses, cows, and pigs. This discovery shifted European market from Mediterranean sea to Atlantic Ocean. -
Import of African slaves
After white settlers started to grow tobacco and sugar cane in their new colonies, they needed more labor force. So they imported more than quarter of a million African slaves. Those farms made huge profit and became one of foundations of early colonies. -
Navigation Law of 1650
This is the first law for regulating the mercantilist system in colonial America passed by Parliament. This made all commerce thai is flowing to and from the colonies could be transported only in British vessels. Consequently it unabled Dutch shippers trying to elbow their way into the American carrying trade. -
Sugar Act
The first law ever passed by that body for raising tax revenue in the colonies for the crown. It increased the duty on foreign sugar imported from the West Indies. This act ignited following revolts of Americans and series of acts of British who wanted to brew revolution. -
Intolerable Acts
After the Boston Tea Party on Dec 16, 1773, Parliament responded with even more severe series of acts. Intolerable acts describe Boston Port Act, Massachusetts Government Act , Administration of Justice Act, Quartering Act, and Quebec Act. IT mostly affected Massachusetts, and most economic flows of America became undergoing British Authority. -
Declaration of Independence
Colonial America finally won the war against the Great Britain. America established its own constitution and cabinets, encluding secretary of treasury. Because America had to fight unprepared war, it owed a lot of money. Inevitably, United States' finance starts with dealing with debts. -
The first bank of the United States
Alexander Hamilton, first treasurer of the United States, suggested major financial innovation. Hamilton proposed establishing the initial funding for the Bank of the United States, throwing stock to public sale.Unlike the Bank of England, the primary function of the Bank was commercial and private interests. -
Embargo Act
Because of conflict between British and American ships, the demand for a war was increasing. president Jefferson did not favor the war, so he recommended to Congress an embargo which would prohibit all American ships from departing for a foreign port. However, Embargo became a financial disaster for the Americans because the British were still able to export goods to America -
Panic of 1819
The Panic of 1819 was the first major financial crisis in the United States. In early 19th century, most economists who believed in Keynesian economic theory suggest that the Panic of 1819 was the early Republic's first experience with the boom-bust cycles that is common to all modern economies. First, monetary policy that kept issuing bank notes brought inflation. Additionally, debt from the war caused series of bankrupcies and failure of banks. -
Andrew Jackson's bank-veto
President jackson disliked mmonopolistic banking, because when paper notes are printed by private banks, it grankds bankers considerable power over the nation's economy. By vetoing its 1832 re-charter, Jackon destroyed the national bank. Then he issued Specie Circular to western small banks. Lack of notes for exchanged brought collapse of banks, and it became direct cause of panic of 1837 -
Emancipation Proclamation
During the American Civil War, President Lincoln issued a proclamation that he would order the emancipation of all slaves in any state of the Confederate States of America. As South was fighting to the point of exhausion, this crushed cotton kingdom. While Northern America was experiencing boom with industrial revolution, South lost its whole economic foundation. The economic imbalance between North and South became huge. -
Transportation Revolution
As the steam engine was put on many areas such as steamboat and train, it became possible to aid goods throughout country. Especially President Lincoln encouraged railroads for purpose of aid of weapons and supplies. This revolution brought dynamic moblility to country. -
Panic of 1873
This is the first economic depression that spread internationally. The panic was caused by the fall in demand for silver internationally, which followed Germany's decision to abandon the silver standard. The failure of the Jay Cooke bank set off chain reaction of failures of banks, and New York Stock Market had to close temporalily. This even shows that American became the part of global economy. -
Interstate Commerce Act
he Act was passed in response to rising public concern with the growing power and wealth of corporations, particularly railroads, during the late 19th century. As railroad companies became monopolistic and huge influence to individuals and businesses., The act worked to keep rates and railroad revenue up on routes where competition existed. This act is one of ealiest acts that prevent individual or group from getting too much power. -
Panic of 1893
Similar to the Panic of 1873, this panic was marked by the collapse of railroad overbuilding and shaky railroad financing which set off a series of bank failures. It started with bankruptcy of one of railroad companies, and President Cleveland directly dealt with crisis. However, with concern, people withdrew their money from banks and caused bank runs. It ended up with President Cleveland borrowing money from J.P. Morgan. -
Open Door Policy
the United States had become an East Asian power after it gained control over Cuba,Philippines, and many other islands in Caribbean Sea. When Europe, Japan, and Russia's competition within China's economic policy enlarged, the U.S. government stated Open Door Policy to make fare trade to everyone. However, it rather strengthened competing powers. -
Panic of 1907
It was financial crisis that New York Stock Market lost 50% of its value. The panic began with corner of the market on the copper company Nickel Bucket Trust. As the crisis spreads, people withdrew their money from bank just like panic of 1893. J.P. Morgan again helped situation by taking over failed companies. The U.S. government realized the necessity of central bank. -
The Great Depression
Late 1920s was continuance of upward market. The major cause of crash of New York Stock Market was a time of wealth and excess. Even after crash, optimism convinced that stock will return back. Situation only got worse, and it became international deep depression. Unemployment rate reached highest record, people had to either default their lone or withdraw all their money. This was the worst economic era in history. -
1973 oil crisis
The 1973 oil crisis started when the members of OAPEC proclaimed an oil embargo.The oil prices raised extremely high causing a recession, and Stock Market crashed following year. This is considered as first economic crisis after the Great Depression. -
Iraq War
Iraq War is one of the latest wars in the world. United States and claimed that Iraq's alleged possession of weapons posed a threat to their security and that of their regional allies. During this war, the financial cost of the war has been more than $845 billion to the U.S. National debt of the United States is increasing everyday, and Iraq War is one of biggest costs.
