Economy (1865-1890) Flashcards
Why was the (northern) economy thriving in 1865?
The northern states had industrialised and urbanised and therefore flourished during and following the US Civil War.
Why did Andrew Carnegie’s Steel Companies succeed?
Andrew Carnegie’s Steel Companies - used the Bessemer Process to produce steel cheaply and therefore create high profits.
How did Carnegie Steel Company thrive by 1890?
Carnegie Steel Company - Hugely thrived and by 1890 it produced 70% of the US’s output of steel.
Name a oil company which thrived in the early 1870s. Why did it thrive?
The Standard Oil Company. Founded by J. D. Rockerfeller, in 1870, used vertical integration (which entails controlling all stages of oil making) and therefore could maximise efficiency and minimise expenses.
Why did the textiles industry thrive following 1865?
The US Civil War had created a high influx of demand to a low supply ratio. This initiated the introduction of mechanisation within the textiles industry and machines such as the Spinning Jenny, Power Loom and Cotton Gin.
Name a manufacturing company which thrived between 1865 and 1890.
The McCormick Harvesting Machine Company thrived within this period. The company was known for inventing a mechanical reaper in 1831. The increase in use of technology and the increased demand throughout this period was revolutionary for this company. It also aligned with the idea of vertical integration.
Name 3 founders of monopolies within the US between 1865 and 1890.
J. P. Morgan
J. D. Rockerfeller
Andrew Carnegie
What company did J. P. Morgan own?
J. P. Morgan had influence over a multitude of businesses and companies. He only actually co-founded his banking firm J.P Morgan&Co.
What were the issues with monopolisation between 1865 and 1890?
1) Anti-competitive practices
2) Economic Inequality
3) Market Manipulation
4) Political Corruption
5) Threat to Democracy
What are anti-competitive practices?
Tactics such as price-fixing allowed monopolies to control market prices, limit consumer choice, and suppress smaller competitors.
Elaborate on the economic inequality that monopolisation caused.
The concentration of wealth and power in the hands of a few industrialists and corporations led to widening economic inequality during the Gilded Age. Monopolies had immense fortunes while workers faced low wages, long hours, and poor working conditions. This disparity in wealth distribution exacerbated social tensions and contributed to labor unrest.
What was market manipulation?
Monopolies and trusts exerted significant control over market conditions, allowing them to manipulate supply and demand to their advantage. By controlling access to essential goods and services, monopolies could artificially inflate prices, exploit consumers, and undermine free-market principles.
How did monopolisation create political corruption?
The immense wealth and influence wielded by monopolies and trusts often translated into political power and influence. Industrialists like John D. Rockefeller, Andrew Carnegie, and J.P. Morgan used their resources to sway politicians, influence legislation, and secure favorable government policies. This led to concerns about political corruption and the undue influence of corporate interests on government decision-making.
How was monopolisation a threat to democracy?
The unchecked power of monopolies and trusts posed a threat to democratic governance and economic freedom. The immense influence of corporate interests over government policy-making undermined democratic principles of accountability, transparency, and fair representation, leading to concerns about the erosion of democratic institutions and values.
The Standard Oil Company was part of all of these problems… why?
Standard Oil used price fixing - by making agreements with railroad companies. It also temporarily undercut its competitors with unsustainable prices which left many of its competitors bankrupt. Further to this it used its dominance of the market to dictate and inflate prices.
