Economy (1865-90) Flashcards
(48 cards)
1
Q
5
Describe the immediate social and economic impact of the CW
A
- Southerners lost massive amounts of wealth as farm lands were destroyed in the war
- The production of cash crops like tobacco and cotton decreased until 1879
- South had to rebuild its previously slave-dependent labour system
- All confederate bonds and currencies became worthless
- All Southern banks failed, precipitating depression which accentuated North to South economic inequalities
2
Q
8
List the different factors of economic growth during Reconstruction
A
- Impact of Civil War
- Availability of Land
- Population growth
- Transport
- Availability of Capital
- Role of Government
- Technological improvements
- Trusts
3
Q
5
Describe the impact of the CW on economic growth during Reconstruction
A
- Stimulated demand for guns, clothing and transport
- Need to raise funds for war led to development of sophisticated capital-raising system based on Wall Street
- Paper currency introduced
- Banking system evolved with growing level of money in circulation
- Higher tarrifs reduced foreign British competition, protected US industry and provided Government income
4
Q
3
Describe how the availability of land contributed to economic growth during Reconstruction
A
- Fertile land led to mass production of wheat (6m bushel exports in 1867, 102m in 1890)
- Greater demand for food at home and abroad encouraged mechanisation of farming, which stimulated demand for manufactured goods
- Westward expansion further increased agricultural production
5
Q
5
Describe how population growth contributed to economic growth during Reconstruction
A
- Increase in population from 31.5m in 1860 to 50m in 1880
- Permitted by increased income, healthier food, better housing, public health, etc
- 2.8m immigrants in 1870s from Europe and Asia
- Expansion of cheap labour
- Stimulated demand for coal, clothes and food
6
Q
5
Describe how transport contributed to economic growth during Reconstruction
A
- first transcontinental railroad in 1869 opened West to minng and ranching
- NY to SF took 6 days rather than 6 months
- Led to more efficient transfer of materials e.g. coal from West Virginia coalfields to factories of New England
- Railroad track grew from 35k miles in 1865 to 200k in 1893
- Stimulated growth of other industries (see card below)
7
Q
4
Describe how transport expansion stimulated the growth of other industries
A
- Stimulated growth of oil and steel industries to provide engines, vehicles and stations
- Employed 1m by 1900
- competition pushed down prices and facilitated technological improvements
- roads needed next to rail centres
8
Q
3
Describe how the availability of capital contributed to economic growth during Reconstruction
A
- Highly-developed stock market (where profits invested to faciliate econ growth) provided capital for entrepreneurship
- $6bn annual turnover on NYSE by 1865
- 2nd largest money market in world by 1890
9
Q
7
Describe how the role of the government contributed to economic growth during Reconstruction
A
- Laissez-faire
- No corporate taxation
- No labour restrictions
- Congress/state government dominated by business interest
- Congress willing to impose high protective tarrifs - some duties as high as 50%
- Trade unions weak, divided and had no relationship with Government
- Employers supported by state and federal authorities during strikes
10
Q
3
Describe how technological improvements contributed to economic growth during Reconstruction
A
- Bessemer Converter process introduced to USA - first inexpensive industrial process for mass production of steel from molten pig iron
- Made it cheaper to produce steel in USA than Britain
- Carnegie kept prices low and re-invested in new manufacturing plants and equipment
11
Q
4
Describe how corporations and trusts contributed to economic growth during Reconstruction
A
- ‘Trustee’ appointed to oversee company in other state to bypass state laws preventing individuals owning shares in mutliple states/corporations
- 3 employees acted as trustee for all stock and property company that it was legally unable to own outside home state
- Monopolisation e.g. Cleveland Massacre 1872
- Cartel agreement - formal agreement between competing companies to control supply or manipulate prices to maintain high profits
12
Q
2
Outline examples of trustee agreements of Standard Oil
A
- Henry Flagler appointed himself ‘trustee’ for Standard Oil
- 1882, 9 trustees ran 41 companies in Standard Oil trust
13
Q
5
Describe the cause of Panic and Depression of 1873
A
- Poor banking system allowed local banks to keep their deposits in larger privately- banks, esp in NY
- Led to foolish investments by NY banks
- Jay Cooke and Company (principal investor in Northern Pacific Railroad) railroad speculator that went bankrupt
- Stock market prices crashed
- Economic reversal in Europe further accelerated depression
14
Q
3
Describe the effects of the Panic and Depression of 1873
A
- NYSE closed for 10 days and credit dried up
- 1m labourers unemployed nationally (1/4 in NY) in winter 1873-74
- Construction of new raillines declined from 7.5k miles annually in 1872 to 1.6k miles in 1874
15
Q
7
List the positive effects of industrial growth from 1865-90
A
- Creation of transport systems
- Innovation e.g. Bessemer process
- expansion of ‘white-collar’ jobs in admin and service industries
- some opportunities for women to work in variety of jobs
- geographical mobility of workers made them ready, as consumers, to accept standardised products and not rely on local goods
- beginnings of black migration North
- increasing wealth gave greater international political and economic power over other nations
16
Q
4
List the negative effects of industrial growth from 1865-90
A
- Social problems in cities
- Big agri dominated smaller farmers and pioneers
- creation of powerful and largely unregulated corporations and trusts, often using fraud and violence to achieve success
- Growth of middle class which lobbied against poor housing, and the evils of drink and prostitution
17
Q
3
Describe what happened to cities’ identity as a result of industrial growth 1865-90
A
- manufacturing moved to cities post-CW rather than near power sources like coal - enabled by railroad system
- Cities became identified by what they produced
- e.g. Birmingham, Alabama manufactured steel
18
Q
4
Describe the social problems faced by cities due to industrialisation 1865-90
A
- Overcrowding e.g. tenement housing
- cities unable to cope with health and sanitation demands
- entrenched exloitation of corrupt local govt and Boss system
- ethnic tension and gang violence
19
Q
3
Describe the American economy by the 1880s
A
- By 1880s, the economy was growing at annual rate of 3.8% and GDP almost doubled
- Dominated by few individuals and corporations who adopted unscrupulous methods
- Facilitated by laissez-faire approach
20
Q
3
Describe the methods of robber barons
A
- monopolised large industries through formation of trusts
- exploited workers
- engaged in unethical business practices
21
Q
4
List the 4 key robber barons
A
- Vanderbilt - railroads
- Carnegie - steel
- Rockefeller - oil
- JP Morgan - finance
22
Q
7
Describe Cornelius Vanderbilt
A
- Alongside son, became most famous railroad tycoons
- Worth $11m in 1862 - grew wealth with railroad industry boom
- Bought out other railroad companies in 60s
- Consolidated many in East, cutting operational costs
- One of first to replace heavy iron railroads with more durable steel
- Wealth reached $100m during boom years
- Richest man in America when he died in 1877
23
Q
4
Describe William Vanderbilt
A
- Inherited bulk of welath
- Ruthless manipulation of capital
- Brutal handling of strikes made him one of most unpopular men in USA
- Richest man in world at time of 1885 death
24
Q
6
Describe Carnegie
A
- Scottish immigrant
- Used British-invented bessemer converters to make better and cheaper steel from iron.
- When demand for rails declined he switched to bridges, machinery, wires, etc
- Monopolised steel industry through vertical integration - controlled all process from extraction to making of finished products
- Ensured lower prices
- 1901 - sold his steel empire to the banker J.P Morgan for $480m
25
# 4
Describe Carnegie's philanthropy
* Outlined in his collection of writings, *The Gospel of Wealth* 1889
* donated to universities, hospitals, free libraries, parks, swimming baths and churches
* Actions contradicted his exploitative business practices with low wages and demanding work hours
* Seen as socialist by some business owners
26
# 6
Describe Rockefeller
* Studies of disorganised oil industry led him to envision its universal scale
* Bought the first oil refinery in 1862
* 1870, set up Standard Oil Company in Ohio
* **Cleveland Massacre 1872 - acquired 22/26 rival refineries**
* 1880s - Controlled 85% of all American oil production
* 1913 - World’s first billionaire
27
# 4
Describe Rockefeller's business methods
* Bought out rival competitors
* Undercut rivals through cost-cutting measures
* Made secret arrangements with railroads to prevent free and fair competion
* Utilised fixed prices
28
# 2
Describe Rockefeller's philanthropy
* $550 million
* Given away to medicine, African-American educational institutions and the Baptist church
29
# 5
Describe JP Morgan
* Inherited $12m - but increased his fortune by his skills as a financier
* 1871 - began his own private banking company
* Major force behind M&A of time
* 1901, merged 2 major steel companies into US Steel Corporation - first $1bn company in history
* Monopolised railroad industry in 1890s following Interstate Commerce Act 1887
30
# 2
Describe personal criticism of JP Morgan
* Accused of flaunting wealth
* Power and influence attracted a lot of media and government scrutiny
31
# 3
Describe the background to trade unions
* Before 1877, largely sporadic and localised
* National Labor Union an exception
* Emerged due to rapid industrialisatiom
32
# 5
Describe the National Labor Union
* Formed 1866
* 77 delegates representing 60k workers gathered at Baltimore to launch national organisation
* adopted platform of 8hr work day
* Economic depression 1873 and resulting unemployment ended movement
* had fallen from peak 300k in 1872 to 50k in 1877
33
# 2
Describe the background to the National Railroad Strike 1877
* 1877, the owners of the B&O (Baltimore and Ohio) Railroad announced a pay cut, the 4th in as many years
* Workers walked off the job and were joined by other workers in coal and iron and steel industries
34
# 6
Describe the events of the National Railroad Strike 1877
* At hieght, strike supported by 100k workers
* Mass of strikers attacked railroad yards
* Burned trains and teared up tracks
* Violence worst in Pittsburgh
* Military force under Hayes' direction ended month of disorder
* Strikers destroyed $10m worth of property
35
# 3
Describe the violence in Pittsburgh
* 5k workers fought 650 federal troops
* more than 500 cars, 104 locomotives and 39 buildings burnt
* 25 killed in rioting crowd
36
# 4
Describe the consequences of the National Railroad Strike 1877
* Prospect of renewed social warfare frightened middle-class urbanites
* Convinced workers to need to organise to withhold Government pressure and advance agenda through political activity
* Unions grew rapidly in succeeding decade e.g. KoL
* Conversely, business community resolved to suppress labour associations by any means necessary
37
# 3
Describe the Knights of Labor
* Founded 1869
* Built comprehensive movement comprising workers of all races, genders, ethnicities and occupations
* Broad aims
38
# 4
Describe the aims of the Knights of Labor
* Lobbied govt for 8 hour days and child labour restrictions
* Also campaigned for initiatives and referendums
* Sought to build more cooperative labour-management relations
* Aimed for businesses ran by council of workers and for managers within genuinely democratic enterprises
39
# 4
Describe the growth of the Knights of Labor
* Grew rapidly in 1880s
* 1885, Knights organised a walk out in sympathy after Wabash Railroad tried to break a local union
* within days, entire southwest system in disarray and the company forced to negotiate with workers
* spurred considerable growth: 100k members (1885) to 750k members (1886)
40
# 5
Describe the decline of the Knights of Labor
* Many members were only occasionally willing to walk out despite growth
* 8hr day rally in Chicago’s Haymarket Rally 1886 turned violent
* KoL were most vehemently condemned because of their size
* Within a year of the riot, the Knights’ membership had been cut in half
* Within a decade, they were almost extinct
41
# 4
Describe the background to the Haymarket Bomb Affair 1886
* May 1886, Strike at McCormick Harvester Works, Chicago
* Pitched battle occurred between strikers (Irish faction-led Trade Union that had become inflitrated by radicals) and strikebreakers
* Police fired into the crowd, killing 2
* Black International organised rally in Haymarket Square, the centre of packing houses of lumbering yards in Chicago, the following evening
## Footnote
Black International - a revolutionary anarchist organisation set up in Chicago in 1881
42
# 5
Describe the events of the Haymarket Bomb Affair 1886
* mass meeting addressed by radical anarchists like August Spies and Samuel Fielding
* individual threw a bomb at the on duty-policeman
* 60 wounded, of which 7 were killed
* Police retaliated and fired into the crowd; wounding over 100, killing 4 workers
* 8 anarchists found guilty, 4 of which executed in 1887 (despite lack of tangible evidence)
43
# 4
Describe the consequences of the Haymarket Bomb Affair 1886
* Intense public hostility towards anarchists and trade unions
* Led to substantial failure of 8hr movement of 1886
* Of workers who took part in movement, only 15k retained earnings by the end of 1886
* Increased xenophobia as many immigrants were trade unions members
44
# 5
Describe the American Federation of Labor (AFL)
* Founded 1886
* Samuel Gompers elected president 1886-1924
* Played a central role in labour movement following KoL’s downfall
* Membership at more than 250k by 1892
* Held policy to support unions in securing agreements by collective bargaining and only striking hard when this failed
45
# 4
Describe the structure of the AFL
* Coalition of different trade associations rather than single union
* Recognised autonomy of member unions - executive council could not interfere in the internal affairs of members
* Levied tax on member unions to create strike fund and maintain a secretariat
* Formed central and state federations to promote labour legislation in cities and states
## Footnote
secretariat - permanent administrative department
46
# 3
Describe limits of the AFL
* Only accepted skilled white men, unlike KoL
* Objectives comparatively weak - focussed largely on higher wages and shorter work days
* foresaked larger political and social objectives of the Knights
47
There was real wage growth of (...) between 1860-90
60%
48
# 2
Describe the McKinley tariff Act 1890
- raised taxes on most imported goods from 38% to 49.5%
-while eliminating the tax on luxury items such as coffee, tea
