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Industrial Revolution
Clothing making moved from the homestead to the factory during hte first industrial rebolution. Automation on a large scale was firts introduced, which allowed for the first real mass production and a concurrent introduction of factory jobs which were higher paying than agriculture. -
Evolution of North Eastern Economy
During the revolutionary and pre-revolutionary period, New England was the mecca of American shipping and trade. After the revolution, Alexander Hamilton's stewardship and new technologies prodded New England toward manufacturing. During this period an extensive railway network was built and factorys sprung up revoutionizing the way new Englanders lived and worked. -
Cotton Gin Invented
The invention of hte cotton gin was the single most important event in the economics of the southern slave-based plantation system until the civil war ended it. Large plantations were not scaleable because people had to pick out the cotton seeds by hand. The cotton gin took this task out of the hands of humans and completely automated it, allowing human labor to be focused on picking cotton. This was profitable, and paved the way for the massive plantations of the nineteenth century. -
Gold Rush
In 1848, gold was discovered at Sutter's Mill in California. A mass migration of prospectors to California followed. This sped the population of the west, California in particular. -
Population Changes 1860-1900
Late 19th century America saw a large influx of “new immigrants” from Southern and Eastern Europe. As immigrants flooded the labor markets the value of labor went down allowing big business to make larger profits by paying their workers less money. With the new wave of immigration the economy changed. When wages were cut, workers and labor unions fought back and tried to get a better life. Many strikes resulted. -
Information Revolution of the Late 19th Century (1)
What most set the great industrialists apart from their less successful competitors was their ability to accurately record and make use of information. Andrew Carnegie was one of the most successful pioneers in the new field of data analysis. As a railroad executive, he set prices at levels that would keep trains at capacity, but not lower than necessary. He used this information-centric approach to focus on cost cutting and extreme efficiency. -
Information Revolution in the Late 19th Century (2)
As a steel magnate, Carnegie scrutinized every corner of his enterprise. He knew exactly the cost of one pound of steel, and could set prices accordingly. With this information at his fingertips he easily out-maneuvered his cumbersome competitors, able undercut them through a thoroughly scientific version of cutthroat competition and lower basic operating costs from increased efficiency at all levels. -
Boom and Bust Cycle in American Agriculture (1)
Lack of diversification, overproduction, and heavy indebtedness of small farmers subjected many farmers to the fluctuations in world agricultural prices. This forced a boom and bust cycle that defined the agricultural industry during this time period. This cycle was epitomized by the experiences of the wheat farmers of this period.
Cheap land, the expansion of railroads, a mechanization revolution, and large investments all allowed for a rapid and massive expansion in agricultural output. -
Boom and Bust Cycle in American Agriculture 1860-1900 (2)
1873 marked the beginning of huge capital investments in wheat farming. These early adopters reaped huge profits by utilizing massive economies of scale through giant landholdings and huge investments in mechanization. But as word of their profits spread, the wheat business became flooded by thousands of startups which pushed supply far above demand. This overproduction and lack of diversification forced many farms into insolvency by 1890. -
The Railroad Industry 1865-1900
Railroad expansion was perhaps the most important infrastructural development of this period. By 1900, 193,000 miles of railroad track covered the United States – more track than in all of Europe. But this came at a heavy cost. Railroads were capital-intensive, and heavy competition often forced firms into oppressive debt. Railroads were an excellent case-study in another trend of this period: consolidation. By 1893, railroad networks had been consolidated within a few dominant corporations. -
Panic of 1873
In 1873, a large financial panic began which would not dissipate until 1897. The panic was caused when the value and silver was dropped and thus the value of many people's money was lost. This panic and the accompanying depression led to a nation-wide struggle wherein Americans and immigrants could not find jobs or support themselves. -
Overproduction and Imperialism 1890-1910
In addition to the mechanization, economic expansion, increasing efficiency, and general business growth of the late nineteenth and early twentieth century, the American government pursued imperialist policies to facilitate this economic expansion. -
Overproduction and Expansion 1890-1910 (1)
During the Gilded Age rapid increases in efficiency and production capacity forced American businesses to look for new markets abroad. This was an unusual type of economic expansion. Endemic protectionism in international markets did not allow for standard international expansion. The economic success of America’s businesses gave the American government significant incentive to create other markets where American businesses could sell products free of protectionism. -
Panic of 1893 (1)
Laissez-faire government, rapid economic growth, and heated competition combined during this period to begin one of the most intense boom and bust cycles in United States history.
This panic centered on the railroad industry. Railroad was one of the most competitive industries of this period. Competition was so intense that companies were often forced to sell their products below cost to undercut rivals. This market distortion created overproduction which meant overbuilding for railroads. -
Panic of 1893 (2)
Eventually the railroads had bled themselves so much through this “cutthroat” competition that they became insolvent. Railroads collapsed leading to public insecurity about the stability of banks which led to a rush to redeem notes for gold. When the United States began to run out of gold in the depths of this crisis, President Cleveland was forced to borrow $65 million in gold from banker JP Morgan. -
Pullman Strike
In 1894, the Pullman railroad company workers went on strike to resist their low wages and long hours. In order to do this, the members of the American Railway union stopped running Pullman cars. To stop this movement, the Supreme Court ruled that the strikers were acting in restraint of trade as defined by the Sherman Anti-Trust Act, a piece of legislation created to curtail monopolistic business practices. -
Influence of business on imperialism
At the time of the Cuban revolt, US businesses had nearly 50 million dollars in Cuba and imported about 100 million dollars worth of goods annually from Cuba. This created pressure to become an imperialist nation and take control over Cuba and its economy. Also, during the imperialist era, one of the main motives for being imperialist was to further economic ties around the world and to use smaller nations for trade and to enhance our own market. -
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Progressive Era
During the Progressive Era, many progressive ideas and reforms influenced the economy of America. The 16th Amendment created a direct income tax, which would allow the government to collect funds as opposed to the earlier method of using tariffs. Also, trust busting broke the monopolies of many big businesses in the nation. Finally, the Federal Reserve Act of 1913 created 12 regional banks and a central bank to control currency, circulation, and giving/controling loans, and set interest rates -
US Steel Created
Andrew Carnegie, a man known for his success in the steel industry, first decided to create his own steel mill. He then perfected vertical integration, where he owned all of the stages of making steel. This, along with the large demand for steel allowed Carnegie to make a very large profit. In 1901, he wrote a number of nearly half a billion dollars on a napkin and gave it to J.P. Morgan. That number was the price Morgan paid for Carnegie Steel, which he combined with his other holdings in the -
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The War Economy
With the advent of World War 1 came two parallel phenomena. First, thousands of young men were shipped off the continent to Europe. Second, the Allied powers’ constant demand for munitions and other war supplies forced America to expand significantly. So, as demand jumped dramatically the labor force actually shrunk. This led to an unemployment drop and wage increases. The war economy was a boom economy, but when the war ended everything was reversed, and a ravaged Europe was not a good market. -
Black Thursday
On October 24, 1929, overproduction and a decrese in demand for consumer goods caused mass panic. Reports explained the drop in value of many companies and many people rushed to sell their stocks, as stock speculation became so popular during the 20s. The stock market's value declined dramatically. In an effort to fix the issue, a group of businessmen decided to buy millions of dollars in stock. This seemed to work and things looked better the next day, but it proved to be ineffective. -
Black Tuesday
Five days after the scare on Black Thursday, October 29 became the day infamously known for the official start of the Great Depression. Stock speculation, buying on margin, artificial wealth of companies, and overproduction caused the stock market to crash on Black Tuesday, and many people lost most, if not all, of the money they had. In one week, the stock market had lost 50% of its value. -
Great Depression
The Great Depression was a decade long economic slowdown. It caused widespread hardship, stranded a generation, and affected every sector of the economy. The Great Depression destroyed many peoples’ savings and loaded banks with toxic valueless assets, which made it particularly difficult to fix. The bank runs which plagued the banking system during the early days contributed to this meaningless destruction. -
1920's effects on 1930s
Fabulous economic growth fueled wild speculation during the 1920’s. The incredible volumes of money that were invested in stocks drove the prices up well beyond the underlying value of the companies that the stocks were supposed to represent. This is called an asset bubble, and it burst in 1929 to start the Great Depression. -
Hawley-Smoot Tariff
The Hawley-Smoot Tariff is emblematic of the conservative wing’s response to the Great Depression. Supply-side economics posits that an advantage for the business sector is an advantage for all. By enacting this high tariff Mr. Mellon and President Hoover hoped to allow businesses to sustain or raise prices by eliminating competition. They failed to account for the fact that businesses cannot sell to destitute consumers, and this failure led to this ill-fated move that prolonged the Depression. -
Federal Deposit Insurance Corporation
When the Glass-Steagall Act was passed in 1933, it created a revolutionary program that would greatly influence Americans lives during the Great Depression. This program was the Federal Deposit Insurance Corporation (FDIC), which assured citizens $5000 from the government if their bank failed. It was important to people because after the stock market crashed in 1929, bank runs occured and many lost all the money they owned. -
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World War 2
During World War 2, the extremely low unemployment rate that had haunted Americans in the previous years nearly vanished. There was a substantial amount of work available producing armaments and other wartime prodcuts. Government spending reached an all-time high of 98.4 billion dollars in 1945. Women too filled in for men as they left to fight overseas. -
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Armament Production
During World War 2, government spending reached 98.4 billion in 1945, and armament production sky rocketed. In 1940, the Us was spending about 1.5 billion dollars on the production of armaments, and then the war began in 1941. In 1943, the US was spending 37.5 billion dollars, which was substantially larger than other nations. -
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World War 2 Economic Regulation
At this time, the government took unpresidented steps to regulate the economy:
War Production Board-(similar to WIB of WW1) managed who was creating what type of military supplies, provided industried with supplies, and told some factories to produce war materials instead of what they previously were making
National War Labor Board- sought to resolve disputes between management and labor
Smith Connally Act- allowed the president to take over industries essential to war if there is a strike -
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Cold War
Directly after the Second World War, the US was involved in what became known as the Cold War with the USSR. It involved high tensions between the two nations due to the fear of the spread of communism around the world and of Soviet influence. This caused the US government to advise production of many new weapons and technology. As a result, government spending and the accumulation of debt would remain high for a long period of time. -
The Cold War
During the Cold War, President's Truman and Eisenhower never fully demobilized from World War II. During Eisenhower's presidency, defense spending would continue to make up around 50% of a federal budget which was much larger than it had ever been in the past. This substantial spending supported a large defense industry in America which continues to provide employment for Americans throughout the Cold War. -
Shift to a service economy + education
After World War II, the GI bill sent thousands of young men to colleges and vocational schools. Increased mechanization and an increasingly skilled workforce allowed for higher paying jobs in services. This stimulated a post-war boom that forged, for the first time, the strong, filled out middle class which would in turn provide the demand that would fuel future growth. -
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African American Economic Opportunity
During this time period, and mainly in the 1960s, many social changes were erupting in America. Among these was the African American civil rights movement. They put pressure on the economy with boycotts and sit-ins. However, the real economic issue was that despite their vigorous efforts, blakcs did not gain greater oppotunitites with employments and still struggled with poverty. -
Second Industrial Revolution 1860-1910
The internal combustion engine, electricity, and steel were all innovative new technologies which were perfected during the second industrial revolution. This was essentially the furthering of the first industrial revolution, Carnegie Steel, Standard Oil, JP Morgan, the railroad giants, and many other industrial titans rose to prominence during this period. Working conditions were not good, but factory wages provided more income than agriculture. -
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Economy of 1960s and Recession of 1969-1970
During the bulk of the 1960s, the Unites States economy was doing relatively well, despite the large sum of money being spent on the Cold War. It grew from 1961 until 1969, when a mild recession occured through 1970. Becuase of the economic expansion and deficit spending of the preceding several years, inflation was rising, causing a recognizable economic decline.pre -
Stagflation
During the 70s and 90s, the nation's economy faced the issue of stagflation. This is when the economy is not growing, production is not increasing, prices are going up but people aren't getting wealthier, and the unemployment rate is high. This mainly troubled Ford's presidency and as a response, the president attempted to WIN (whip inflation now), but failed to solve the problem. -
Arab Oil Shock
In 1973 OPEC stopped sending oil to America in response to America's role in the Yom Kippur War. This precipitated a massive oil shortage in the United States. The 1973 oil shock forced Americans and their government to seriously consider their energy security for the first time, and is still cited today to advocate change in energy policy. -
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Mild Recession of Early 90s
This recession lasted only several months. Relative to other post-war recessions, it was very mild. The main issue was the lack of employment. However, it led a decade of prosperity. -
Economic Boom of 1990s
During the 1990s, the economy experienced prosperity as the GPD or gross domestic product continued to rise for nearly a decade. Stagnation was no longer an issue and the employment rate rose from its previous numbers. -
Recession of early 2000s
As a result of the boom of the 1990s, the US ran into a recession mainly in 2002-2003. This was predicted as other nations had the same issue a year earlier. A contributing factor was that the gross domestic product decreased.
