Economic growth 1865-1890 (causes and effects) Flashcards
Essay question e.g - “railroads were the most significant factor in economic growth” - list 2 other factors
Big business
Population growth
Give 3 reasons why the railroads caused the economic growth
Provided more jobs - by 1900 there was over 1 million workers - needed this as population had grown
Allowed use to the whole continent (Trans continental Railroad 1869) especially the newly acquired West and the natural resources there like coal and copper.
Provided competition for big business (Rockefeller) as to who would get contracts and who would have the best new technologies. This pushed prices down.
Give 3 reasons why big business caused the economic growth
Corporations (owning several businesses and land in different sectors) allowed businesses to grow a lot faster and have the influence. J.P Morgan e.g.
Creation of NY Stock Exchange - place for people to invest money from the Civil War and turn it into profits - $6 billion turnover by 1865
Lack of Trade Unions - meant corporations could treat their employees to bad conditions and low pay without any employee or government intervention. e.g Carnegie increasing hours for less pay
Give 2 reasons why population growth caused economic growth
Larger workforce - population from 31.5 million in 1860 to 50 million by 1880 meant cheap labour for big businesses so they were dispensable. Also were in a lot of cities aiding urbanisation e.g Chicago.
Westward migration - new immigrants to the population settled in the West drawn in by acts like Homestead Act 1862 settled and farmed the fertile soil there/worked on railroads - 20,000 by 1865
What was one of the negative effects of economic growth and when was it?
1873 Depression - there was a depression in Europe and a collapse of America’s banks meaning no credit. Lots of people lost money because of a lack of bank regulation so big banks like Jay Cooke invested money from small banks in projects that then collapsed.
Explain how agriculture was negatively affected by economic growth
You had small farmers competing with Agribusinesses (monopolies using vertical integration) who owned breeding, machinery and supply.
In some areas
Give 2 ways urbanisation (caused by economic growth) had negative effects
Living conditions - temporary housing couldn’t be built fast enough, meant housing was overcrowded and polluted. Also all the rich moved out of the city to the suburbs.
Urbanisation created a ‘boss system’ - the mayor who was the boss ran all the areas of the city including housing, police and utilities where people were employed - so therefore everyone had to vote for him or else they’d lose their jobs - corruption
Give a good and bad fact about Vanderbilt
+ He had a railroad monopoly and put his competitors out of business - even closed the Hudson Bridge to only allow his boats in.
- Revolutionised railroads - creating standard track gauge
Give a good and bad fact about Carnegie
+ didn’t try and put his competitors out of business instead aimed to create a better product at a cheaper price
- Treated workers badly, making them do longer hours for less pay - led to Homestead Strike 1892
Give a good and bad fact about J.P Morgan
+ Created US Steel Corporation the fist billion dollar company ever
- Possibly caused political corruption when he lent President Cleveland $62 million in panic of 1893
How much of the oil industry did Rockefeller own by the 1880s?
85% in the Standard Oil Company - removed competition from industry but saved dying industry
Outline 2 trade unions that emerged from 1865-1890 and describe what they did
Knights of Labour - 1869 - campaigned against Child Labour and for the 8 hour day - forced Jay Gould who ran Wabash railroad to renegotiate breaking up an union - went from 10,000 members to 50,000 - blamed for Haymarket Square Riot
American Federation of Labour - 1885 - collection of independent unions who had independence - prioritised bargaining over strikes
Describe 2 main strikes that happened in 1865-1890
National Railroad Strike 1877 - 5000 workers fought 650 soldiers - caused $10 million in damage and 25 deaths - caused by railroad announced it’s fourth successive pay cut
Haymarket Square Riots 1886 - KofL members were protesting against McCormick Harvester Works but it was hijacked by anarchists with a bomb - 60 people wounded and police officer killed - then police wounded hundreds by opening fire - tarnished cause
What actions were taken against laissez faire policies and big business?
In 1880s - 27 states passed laws against trusts and cartels
Federal laws - 1887 Interstate Commerce Act to regulate railroads, Sherman Anti-Trust Act 1890
850,000 farmers in Granger Movement protested a lack of control over distribution and railroads
Define vertical integration
When a business owns multiple parts of production of a product e.g manufacture, supply and distribution
