The Growth of the Economy

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  • The Growth of the Economy
    • Workforce
      • Rising population and mass immigration meant large workforce
        • Population increased from 62 million (1890) to 92 million (1910)
        • Immigrants from Italy, Ireland, Eastern Europe, China
          • Moved to big cities: Boston, Chicago, New York, Philadelphia, and Pittsburgh
          • China moved to the West (e.g. California)
    • Government
      • Supported big business
        • Benjamin Harrison (Republican) - favoured big business and high tariffs
        • 'Billion Dollar Congress'
        • 'Laissez faire' approach to economy
      • Passed laws to encourage growth
        • McKinley Tariff Act (1890)
          • Tax on the poor and favouring big business
          • Up to 49.5% on certain foreign goods
        • Silver Purchase Act (1890)
          • Helped lead to the 1983 Depression and was repealed that year
          • Government buys 4.5 million ounces of silver per month off of mine owners
    • Investment capital
      • People invested money into companies
        • Allowed them to grow and develop
        • Rockefeller and Carnegie reinvested profits
          • Businesses became more efficient
        • J.P. Morgan (financier) lent money to companies to expand
    • Raw materials
      • Massive supplies of coal, oil, iron (for steel), and fertile land
        • Increased farmland meant more land for grazing for animals which results to more meat
        • Fertile land for: maize, corn, wheat, cotton, tobacco
      • Exploitation became prominent in 19th century
        • Result of advancements in technology
    • Cultural attitudes
      • Derrick Murphy: "Yankee ingenuity"
        • American Dream
        • Hard work pays off
      • American attitude that admires men who work hard, own their own business, or become millionaires
        • Rockefeller and Carnegie were examples to look up to
    • Communications
      • Rail road-building boom of 1860s-70s
        • Good transportation networks across USA
        • Track mileage increased from 30,000 miles (1860) to 190,000 miles (1900)
        • Creates jobs in others industries
      • Development of the telegraph and telephone
        • Sped up trade deals
    • Markets
      • Rising population and mass immigration meant large markets to sell to
        • Population increased from 62 million (1890) to 92 million (1910)
      • Large markets abroad too
    • Industrial organsation
      • Companies bigger and more organised, and forming trusts
        • Able to dominate markets
          • Rockefeller owned 90% America's oil industry (Standard Oil)
          • Carnegie owned 90% of America's steel industry (Carnegie Steel)
        • Cornelius Vanderbilt - rail road tycoon


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