reasons for economic growth 1865-90

impact of the civil war

impact of the civil war

• stimulated demand for manufactured goods for the war effort - mass production and distribution techniques had to be developed

• gov. had to raise money to fund the war - led to capital-raising system on wall st.

availability of land

• increased westward expansion = more land available for agricultural use

• land was very fertile and allowed farmers to grow mass crops eg, wheat, providing for the increasing population

• greater demand led to agricultural mechanisation for a greater crop yield

population growth stats.

1865 - 31.5 million

1880 - 50 million

increased population

• population increased in this period due to mass immigration, higher incomes, better medical care etc

• increased population = increased demand

• also meant an increased workforce, typically cheap labour

role of government

• gov’s laissez faire approach gave businessmen substantial freedom in their enterprise - no laws stopping worker exploitation and no tax on profits

• congress was dominated by big business interests, they were happy to impose protective tariffs

transport

• railroads were spearhead of westward expansion and powerhouse of economic growth

• efficient means for transport in trade

• hired thousands of workers

• encouraged steel and coal production for their development

railroad track figures

1865 - 35,000 miles

1893 - 200,000 miles

availability of capital

• essential to entrepreneurs who needed to borrow money to develop their businesses

• post civil war development of stock market made this available

• 1865 stock market turnover = $6 billion

Corporations and trusts

• corporations were the perfect growth model for big industries - could buy, sell and own properties, hiring management to run them and allowing for market domination

• trusts allowed business to control production and distribution, limiting competition

technological innovation

• Carnegie brought over the ‘Bessemer Converter’ from Britain - made steel production cheaper

• refrigeration in 1867 - assisted meat-packing

• Edison - quadruplex printing telegraph made communication faster