HIST American Economy 1

Property Rights

Give owners the right to do what they want with property they own. The U.S. is rare in having secure property rights

Mercantalism

The government controls trade to enrich the state

Joint-stock company

Allows business owners to share financial responsibility for a business

Tenure

U.S. home ownership rights in the 18th century. If you paid fees for long enough you owned your property.

Bill of Exchange

A written order for one party to pay the other a fixed sum of money

Indentured servants

Immigrants who took on 7 years of service to pay for their voyage

The Virginia COmpany

A joint-stock exchange company from England that established the Virginia colony

Massachusetts Bay Company

Established the Massachusetts Bay colony in New England. Provided a space for Puritans to flee persecution.

Comparative advantage

Because of the natural environment, certain locations are more efficient for producing certain things

Market overt

Buyers were responsible for the purchases they made because they could examine the goods beforehand.

Redemptioner

An English immigrant to the colonies who sold themselves into indentured servitude

Plymouth Colony

Led by Protestant colonists and was the first permanent New England colony

break-in-transport points

Towns of colonists often formed in locations with access to water transport

Opportunity costs

What you go without to pay for what you want

Caveat emptor

Buyer beware. The buyer is responsible for their financial decisions

Navigation Acts

A series of laws intended to regulate trade between Great Britain and the colonies. Wanted to restrict colonial trade

The Sugar Act

Taxed colonists for sugar. Intended to restrict colonists to purchase English goods

Townshend Acts

A series of taxes on colonial goods. Were repealled after a series of boycotts

The Quebec Act

British legislation in Quebec, restored French civil law and allowed Catholics to hold office

Robert Morris

Helped finance the Revolutionary War, wanted to mantain trade relations with Britain post-war, was arrested later in life for financial debts

Proclamation of 1763

The British set a boundry in the Appellations to try to prevent the colonists from settling westward into Native territory. It was quickly violated.

Stamp Tax

Legal actions had to be stamped and paid for

The Intolerable Acts

A series of acts meant to control the rebellious colonies after The Boston Tea Party. Includes the Boston Port Act and The Quartering Act

Jeremiah Wadsworth

Was a purchasing agent for the Continental Army paid by commission, helped found the Nations first banks.

Land Ordinance of 1787

Established principals for the allocation of land in westward expansion, northwest territory was to be run as a district by a governor

Land Ordinance of 1785

Established by the Confederate Congress, established procedure for the transfer of land from the government to individuals

Land Act of 1796

Allowed for the purchase of land north of the Ohio River at a set price per acre

The Graduation Act

Congress reduced the prices of land that had already been sold in auction, which encouraged mass purchase

Preemption Act

Anyone living on land that had not been auctioned could buy 160 acres for minimum price. Was Congress’s attempt to deal with the issue of squatters.

The homestead Act

Any head of a family or adult over 21 could have 160 acres of public land for the payment of a low fee. They had to cultivate the land for at least 5 years to secure property rights

Socage / fee simple

If you pay rent, it’s yours and can be passed to descendants

Rent

Unearned income

Prescriptive rights

Inherent rights to do something

Charles River Bridge Case, 1837

In 1785 MA the government incorporated the Charles River Bridge Company to construct a toll bridge. About four decades later legislation passed to build a free bridge nearby. Charles filed a lawsuit claiming the legislature had gone against their contract but the court concluded that there was never a prohibition of further construction in the original contract and there was public interest in creating new channels for trade

Incorporation

Creates a big, sophisticated economy. Groups of people can own a company which means that companies can outlast their founders

Thomas Jefferson

Opposed stock markets and a central bank. Was pro-free trade in order to export tobacco to Britain

Alexander Hamilton

Was the first Secretary of the Treasury. Believed the government controlling its debt would lead to favorable economic conditions. Wanted the govt. to pay of its Revolutionary War debts to establish responsibility

police power

Was initially locally controlled and was the basis of business regulation

Rent seeking

Seeking a reward for getting into a market limited by the government

Priority rights

Rights above prescriptive rights

Eminent domain

Used by the government to obtain private land for what is claimed to be public benefit

Commerce clause

Gave congress the power to regulate commerce among nations and states

Tench Coxe

Hamilton’s assistant Secretary of the Treasury. advocated for protective tariffs and encouraged the Southern cotton market

Stockton & Darlington, 1825

Was the first passenger railway to use a steam engine

Robert Fulton

Brought the steam engine to the United States from Britain and created the first steamboats

Black Ball Line, 1818

Offered the first transatlantic passenger voyages between New York and Liverpool

Collins Line, 1847

Was created to compete with a Canard’s line but the high cost of construction put it at a disadvantage

Erie Canal

Took 8 years to build and earned $8.5 Mil in tolls its first year. Was approved by NY government.

Matthias Baldwin

Created Baldwin Locomotive Works, which became one of the largest locomotive manufacturing firms in the U.S.

George Stephenson

Greatly innovated the locomotive.

John Stevens

Inventor who pioneered the steam engine

Samuel Canard

Organized a steam package service from Liverpool in the UK to NY

The National Road

Was designed to connect Baltimore to Illinois, 800 miles. Was authorized by Congress. Was constructed very slowly

Baltimore & Ohio, 1828

A series of canals were created, subsidized by the U.S. government. Cost a lot of money to construct and mantain.

Land Grants

In the 1850’s the U.S. government began authorizing land grants to railroad companies.

Cotton factor

Facilitated the sale of cotton for plantation owners.

James W. Monette

Was told by his factor to hold off selling cotton for better market prices. He didn’t listen and was forced to sell cheap

Cyrus McCormick

Invented the reaper, it was very expensive

Industrial Revolution

Involved a diversification of manufactured merchandise followed by mechanization of production. Followed the British

Slater’s Mill

The first water powered textile mill in America

Francis Cabot Lowell

Studied industrial methods in Europe and innovated them in the U.S.

Samuel Colt

Innovated firearm production, greatly increasing mass production efficiency

Oliver Evans

Automated flour mills and pioneered the high pressure steam engine

Waltham system

Relied on domestic labor and low wages

American system

produced a high volume of goods with minimum labor

Tariffs

Used to protect the domestic economy

Bank of North America 1781

Was created under the articles of confederation/

Second Bank of the United States 1816-32

Was chartered by Pres. James Madison, could demand payment in gold or silver

State chartered banks

private banks, could issue paper money for loans

Suffolk System

Private regulation managed by private banks in Boston

Forstall System

Required banks to have a high reserve of 1/3 specie

The gold standard

It was not regulated by anyone, instead it self-regulated

First Bank of the United States. 1791-1811

Set up by Hamilton, helped the federal govt manage finances after the Revolutionary War

Nicholas Biddle

President of the Second Bank of the U.S. Opposed by Westerners and Southerners who wanted low interest rates

New York Safety Fund. 1829

banks required to hold at least 3% of capital stock

NYSE

formed to relocate capital from those who have it to those who need it