Economy 1890-1920

the years after 1890 saw the…

second industrial revolution

manufactured exports rise 1895-1900

90%

manufactured exports rise 1908-1913

77%

USA was an net exporter

by 1913 - increasingly concentrated on iron, steel, copper and oil

• European countries were alarmed by the ‘American Commercial Invasion’

Reasons for economic growth

• efficiency

• labour supply (from immigration)

• rising world demand

• vast natural resources

iron production increase by … by 1913

400%

High grade iron ore found in Minnesota

Mesabe Hills, 1892 - leads to massive growth of iron industry

US oil production by 1910

equalled that of the rest of the world combined - the country became the world’s leading oil producer, oil fields in Oklahoma, California and Texas

NYC population 1890-1910

doubled

Cities with a population higher than 100,000 by 1900

38 cities

agricultural crisis in the 1890s

• farmers suffered due the 1893 depression

• dependency on railroad companies and banks

• volatile economy - subject to swings

• dry conditions - erosion/poor farming conditions, particularly in the West

post-1900 agriculture known as…

the ‘golden age’ of agriculture

legislation that betters agriculture

• Reclamation Act 1902 (funded irrigation)

• Meat Inspection Act 1906

• Federal farm Loan Act 1916

impact of WW1 on agriculture

provided huge markets for food exports - dislocated world markets meant US could export its grain to Europe, less competition

the Northeast

• significant economic growth, booming cities, concentrated transport networks

• dominated politics business and culture as this was where the elites lived

• great migration - 1914-18, 500,000 A-As moved North from the South

the South

• dominated by plantations and ‘King Cotton’ still -few european immigrants headed here

• Expansion due to developments in the oil industry - cities in Texas and Louisiana grew, like Houston, New Orleans

• great migration - leaving A-A population

the West

• continued to see boom towns and ghost towns, some territories did not become states until 1912

• Alaska-Yukon Gold Rush saw towns rise up and disappear eg, ‘tent city’ of Nome

economic expansion was..

not continuous or smooth - there were extensive pockets of poverty in many big cities

Industrial workers responded to low wages and harsh conditions by organising unions and strikes

Panic of 1893 causes

• slowing down of the railroad boom

• sudden bankruptcy of the Philadelphia and Reading railroad

• falling gold reserves

• lack of money supply and subsequent stock market collapse

Panic of 1893 consequences

• sparked a 4 year depression

• 150,000 companies and 600 banks closed

• national unemployment rate reached near 20%

• ‘Industrial Black Friday’ - 25 businesses a day closed in May alone

• known as the ‘Great Depression’

Pittsburgh Steel Workers Strike

1892 - strike at Carnegie Steel Company

• 13 workers killed, one of the deadliest labour-management conflict

• business and gov. came down on strikers, defeat set back union power considerably

Pullman Strike

1894 - the first national railway strike in the US and paralysed the railway system

• the federal gov showed it was hostile to unions and willing to shoot its own citizens

Panic of 1907

• following the collapse of the 3rd largest trust in NY, the Knickerbocker Trust Company

• NY stock exchange fell by nearly 50%

• JP Morgan bailed out the government in absence of a strong central bank

Federal Reserve created

in 1913 by Wilson’s Federal Reserve act

American financiers benefitted from WW1

• many countries ended up borrowing huge sums of money from the USA

• American bankers increasingly invested in Europe and made money from the recovery in the 1920s

• JP Morgan became an underwriter of all Allied war bonds

Gov actions to raise money for WW1

• Liberty Loans

• War Industries Board

• Food and Fuel Act

• War Revenue Act

• Railroads nationalised

by 1918, the USA was…

the world’s leading economy and an economic giant

end of WW1 caused :(

a brief recession in 1921

Impacts of american war economy

• exports rise

• increasing steel production

• full employment

by 1920, USA produced and consumed what percent of the world’s oil

70%

by 1920, USA was leading producer of what?

coal and steel

wealth distribution

wealth was unevenly distributed by 1920, millions of Americans in poverty did not have a share of the nation’s prosperity

• many industrial workers found themselves at the mercy of large business corporations

• overall standard of living was much higher than Europe, they were not as affected by the ravages of war