1. Economic History of the United States – A Review
But not including slavery

2. Early Years Navigation Laws Salutary neglect
From Britain – begin in 1651
Purpose – to enforce British mercantilist system
What is mercantilism?
Salutary neglect
Why?

3. Revolutionary Period Colonial boycotts and non-importation agreements
Why?

4. Articles of Confederation
Trade and Commerce
No jurisdiction
No taxation power

5. The Critical Period – Accomplishments under the Articles
Land Ordinance of 1785
What is the significance of section 16?
Northwest Ordinance of 1787

6. Land Ordinance of 1785

7. Northwest Ordinance of 1787
A major accomplishment of the Confederation Congress!
Forbade slavery in the Northwest Territory
Statehood achieved in three stages:
Congress appointed 3 judges & a governor to govern the territory.
When population reached 5,000 adult male landowners  elect territorial legislature.
When population reached 60,000  elect delegates to a state constitutional convention.

8. The New Constitution Power to tax Regulating trade and commerce
Between the states
Between the US and foreign nations

9. The New Country Hamilton’s Plan Based on: Details of the plan
Report of Manufactures
Report on Credit
Details of the plan

10. Economic History Review
Five Components in Hamilton’s Plan (1)
Funding at Par
Define
Why?
The good and the bad

11. Economic History Review
Five Components in Hamilton’s Plan (2)
Assumption of state debts
Underlying motive
Problems
The Compromise

12. Economic History Review
Five Components in Hamilton’s Plan (3)
Tariff
What is a tariff?
Main purpose?
Secondary goal
Hamilton's Financial Structure Supported by Revenues

13. Economic History Review
Five Components in Hamilton’s Plan (4)
Excise taxes
Define and give examples from today
Whiskey

14. Economic History Review
Five Components in Hamilton’s Plan (5)
National Bank – the foundation of the whole plan
How would it work?
Opposition
Jefferson
Madison
Original National Bank

15. Washington’s Administration
Loose construction vs. strict construction
Define
“Elastic clause”

16. Economic & Social Changes
Eli Whitney – cotton gin
1793
Significance
How did it work?

17. Economic & Social Changes
Economy
1800 – typical family had 7 kids – farmers
NE – new businesses
Samuel Slater – “Father of the American factory system” – why? (1790)

18. Jefferson’s Presidency
Embargo Act – 1807
Define – What was its purpose?
Effects/ Significance
Long term vs. short term effects

19. “Era of Good Feelings” – 1816-1824
Henry Clay’s American System
National bank
Second BUS – 1816
Why?
Protective Tariff
Tariff of 1816
Effects
Internal Improvements
Examples

20. Monroe’s Presidency Panic of 1819 Causes Define overspeculation
Define specie

21. Supreme Court John Marshall – Chief Justice – Federalist
Key economic cases
McCulloch v. Maryland – 1819
The national government is supreme over the states
The national bank is constitutional
Role of the elastic clause
Gibbons v. Ogden – 1824 (steamboat case)
Only the national government can regulate interstate trade and commerce
Why is Marshall’s role so significant?

22. The Market Economy in Antebellum America
Define: antebellum
What was the Market Revolution?
Encompasses about eight areas
Define: subsistence farming
Not the same as the Industrial Revolution
1st Industrial Revolution (before Civil War ) textiles, railroads, iron, coal
2nd Industrial Revolution (after Civil War) railroads (transcontinental), oil, steel, electricity

23. Market Revolution
The "Market Revolution" in antebellum America encompassed several areas:
Industrial Revolution (and its impact on American society)
Transportation Revolution: roads, canals, steamboat, railroad
Change from subsistence farming to large-scale cash-crop farming.
Creation of a national market economy
Regional specialization: East, West and South
Immigration: Irish and German (U.S. need for labor)
Westward movement
Growth of cities

24. The Transportation Revolution
Why?
Desire of the East to access the West (why?)
Roads
Turnpikes

25. Cumberland (National Road), 1811
What is the purpose of this road?

26. The Transportation Revolution
Steamboat
Robert Livingston & Robert Fulton
The Clermont (below) – 1807
Gibbons v. Ogden – 1824
Significance of the steamboat

27. The Transportation Revolution
Canals
The Erie Canal
Where is it?
What did it connect? Significance?
What was its effect on New York City?

28. The Transportation Revolution
Railroads
Significance
The Mohawk and Hudson Railroad’s DeWitt Clinton began service in 1831

29. The Railroad Revolution, 1850s
Immigrant labor built the Northern Railroads.
Slave labor built the Southern Railroads.
1840 – 3000 miles of track; 1860 – 30,000 miles of track

30. Growth of Cities Why did some cities grow more than others?
What was the role of rivers?
How did canals change the patterns of growth?
How did railroads change this pattern of growth?
Railroads are America’s first big business. Why?

31. Growth of Cities - Railroads
T or F - By 1860, the US has more railroad track than the rest of the world combined
Rails link the East and Midwest
Creates cities like Atlanta

32. Growth of Cities - Railroads
Mega Growth – Chicago
1849 – a few hundred people
1860 – over 100,000 served by 11 railroads
Becomes the main commercial hub for the Midwest, supplanting New Orleans
Railroad financial center – New York
Wall Street – NYC becomes the investment center
Money is power!

33. Samuel Slater - Father of the American Factory System
Industrialization
Samuel Slater
New England
First textile mill is in Pawtucket, RI
Much cloth still produced in the home
Causes
Embargo
Protective tariff
Waterpower-why?
Samuel Slater - Father of the American Factory System

34. Industrialization Eli Whitney Textiles in New England Interchangeable
parts
Gun Factory
New England is the
center of the American
gun industry
Samuel Colt
Smith & Wesson
Textiles in New England
Waltham & Lowell mills
Lowell girls – where do they come from? Why?
Are they typical?

35. New England Textile Centers: 1830s

36. Industrialization
What was the effect of industrialization on consumer prices? Why?
Ex.- Clocks – in 1800 cost $50 (made by hand), in 1850 cost 50 cents (made by machine)
Why did the growth of towns lead to an increase in wages?
Steam engines allowed factories to remain open in very cold weather – why?
More jobs, year-round work (compare to farms)

37. Industrialization Quality of life
Cities – most live in Row Houses – define
Smaller for working class than middle class
Subdivided row houses become tenements (?)
Who lived in tenements? Free blacks & Irish immigrants
Rural areas – one-room log cabins
Windows covered by paper or cloth

38. Industrialization Conveniences/ Inconveniences
Coal-burning stoves (pollution?)
Railroads bring in fresh vegetables
Cities have water (at the street hydrant)
Baths? Infrequent, so you smell bad!
Flush toilets still rare
A sign of wealth
Sanitation – the hog department
Horses in cities–manure cleanup?

39. Boom/Bust Cycles:
The blue line shows, for comparison, the price of a year’s tuition at Harvard College. In 1790 it was $24, but by 1860 had risen to $104.

40. Regional Specialization
EAST  Industrial
SOUTH  Cotton & Slavery
WEST  The Nation’s “Breadbasket”

41. John Quincy Adams Tariff of 1828 – “Tariff of Abominations”
What was it?
Why an abomination?
“The South Carolina Exposition”
John C. Calhoun Nullification
What does this remind you of?

42. Jackson and the Bank
Nicholas Biddle
Pet banks

43. Economic History Jackson’s Specie Circular Panic of 1837
Causes
Results
Treasury Bill of 1840
Panic of 1857 – notice any trends?

44. More Economic History Commonwealth v. Hunt Independent Treasury
Massachusetts SC ruled unions are legal as long as they are peaceful
Independent Treasury
Van Buren & Polk
Government deposited $ in private banks

45. Finances of the Civil War
Raising money – North
First income tax
Excise taxes increased
What is an excise tax?
Morrill Tariff of 1861
What did it do? (protective)
Which party is associate with the protective tariff?

46. Finances of the War
Greenbacks
Define
Backed by gold
Bonds

47. Westward Movement Homestead Act of 1862 Morrill Land Grant Act of 1862
Details
Why move west?
Morrill Land Grant Act of 1862
Some examples
Kansas State, Iowa State, Michigan State
Pacific Railway Act – 1863
To build a transcontinental railroad

48. The Southern Economy after the War - Life for the Freedmen
Sharecropping
Why?
Tenant Farming
Crop lien system
How did this work?

49. Sharecropping

50. Tenancy & the Crop Lien System
Furnishing Merchant
Tenant Farmer
Landowner
Loan tools and seed up to 60% interest to tenant farmer to plant spring crop.
Farmer also secures food, clothing, and other necessities on credit from merchant until the harvest.
Merchant holds “lien” {mortgage} on part of tenant’s future crops as repayment of debt.
Plants crop, harvests in autumn.
Turns over up to ½ of crop to land owner as payment of rent.
Tenant gives remainder of crop to merchant in payment of debt.
Rents land to tenant in exchange for ¼ to ½ of tenant farmer’s future crop.

51. Economic Issues Panic of 1873 Greenback issues
Specie Resumption Act of 1875
Push for silver – why?
Bland-Allison Act 1878
Greenback Party formed – why?

52. Overview – What does this reveal?

53. Characteristics of Industrial Change
Cheap energy – coal
Technological innovation
Need for workers – a lot of them!
Competition
Decline in prices
Failure of the money supply to keep up with productivity

54. Railroads Growth Where? Leaders Funding and debt Collis Huntington
Central Pacific
Jay Gould
Union Pacific
James J. Hill
Northern Pacific
Cornelius Vanderbilt
NY Central
Funding and debt

55. Railroads - Significance
Spurred the industrialization of the post-Civil War years (especially steel)
Sprawling nation became united physically.
Created huge domestic market for US raw materials and manufactured goods Probably the largest integrated market in the world.
Stimulated creation of 3 Western frontiers: mining, agriculture, and ranching
Led to great exodus to cities from rural areas in late 19th century           -- Railways could feed huge cities; supply raw materials & markets
Facilitated large influx of immigrants.           -- Railroads advertised in Europe free travel to new farms in the West
Spurred investment from abroad
Creation of distinct "time zones" from coast to coast.
Maker of millionaires; a new railroad aristocracy emerged
Native Americans displaced and herded into ever-shrinking reservations.

56. Railroads - Regulation
Laissez-faire – define?
Regulation from Washington
Interstate Commerce Act – 1887
Creates the ICC
Bans monopolistic behaviors like pooling and rebates
First large-scale legislation passed by the federal government to regulate corporations in the interest of society
But no real enforcement powers

57. Oil and Steel The cornerstone of the Second Industrial Revolution Oil
Steel – skyscrapers to railroad tracks
Bessemer Process
Andrew Carnegie – sold out to JP Morgan
Oil
Would create far more wealth than all the gold mined in the West
Kerosene for lamps

58. Impact of the Second Industrial Revolution
-Standard of living rose sharply and remained highest in the world
-Urban centers mushroomed as factories increasingly demanded more labor
-American agriculture eclipsed by industrialism: railroads, steel, oil, electricity
-Free-enterprise eclipsed by monopoly
-The work-place became regimented and impersonal

59. Impact of the Second Industrial Revolution
-Women achieved social and economic independence in new careers as typing, stenography, and switchboard operating -- Marriages delayed, smaller families resulted
-Social stratification most pronounced in U.S. history By 1900, about 10% controlled 90% of the nation’s wealth.   2. Lower classes envious and resentful of the nouveau riche
-Foreign trade developed as high U.S. productivity resulted in overproduction.

60. Steel Andrew Carnegie “Watch the costs…” Vertical integration
One of the most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was manufactured but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was cooked, etc.
Control every aspect of the production process
Improve efficiency, reduce costs

61. Oil and John D. Rockefeller
Origins (Western PA)
Standard Oil
Trusts
Define
Purpose
Consolidated operations of previously competing enterprises
Horizontal integration
Consolidate with competitors to monopolize a given market

63. Trusts More trusts Congressional reaction
Copper, sugar, whiskey, lead…
Congressional reaction
Sherman Anti-Trust Act – 1890
Sought to prevent trusts from consolidating and restricting trade
Courts will use it against labor (strikes)

64. More Robber Barons J. P. Morgan Gustavus Swift & Philip Armour
Banking
Gustavus Swift & Philip Armour
Meatpacking
Andrew Mellon
Financier

65. New Business Culture
Laissez Faire  the ideology of the Industrial Age.
Individual as a moral and economic ideal.
Individuals should compete freely in the marketplace.
The market was not man-made or invented.
No room for government in the market!

66. The Gospel of Wealth: Religion in the Era of Industrialization
Wealth no longer looked upon as bad.
Viewed as a sign of God’s approval.
Christian duty to accumulate wealth.
Should not help the poor.
Russell H. Conwell

67. “On Wealth” The Anglo-Saxon race is superior.
“Gospel of Wealth” (1901).
Inequality is inevitable and good.
Wealthy should act as “trustees” for their “poorer brethren.”
Andrew Carnegie

68. Rise of Labor Knights of Labor Haymarket Square bombing – 1886
Terence Powderly
“one big union” including blacks and women
Beliefs and Goals
Demise
Haymarket Square
bombing – 1886
Effects

69. Terence V. Powderly of the Knights of Labor
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70. Rise of Labor Working Conditions Key terms
How does the existence of low-skilled jobs affect workers when there are technological advances?
Low wages, long hours
Poor working conditions
Role of immigrants
Key terms
Injunction, collective bargaining, strike, scabs

71. Rise of Labor American Federation of Labor Samuel Gompers
Association of self-governing unions
Goals
Skilled workers
Belief in Closed Shop

72. Samuel Gompers of the American Federation of Labor
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73. Rise of Labor Major strikes Homestead Strike – 1892
Carnegie’s steel plant
Result
Pullman Strike – 1894
Role of Eugene V. Debs
Results
Role of government

74. Pennsylvania Militia at Carnegie’s Homestead Steel Mill, 1892
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75. Rise of Labor Long term effects
Acceptance of workers’ right to organize, bargain collectively, and strike
Which political party is more supportive of labor? Why?
Labor Day made a holiday by Congress

76. Causes of the 1893 Panic Worst of the century
Begun 10 days after Cleveland took office.
Several major corporations went bankrupt.
Over 16,000 businesses disappeared.
Triggered a stock market crash.
Over-extended investments.
Bank failures followed causing a contraction of credit [nearly 500 banks closed].
By 1895, unemployment reached 3 million.
Americans cried out for relief, but the Government continued its laissez faire policies!!

77. Coxey’s Army, 1894
Jacob Coxey & his “Army of the Commonweal of Christ.”
March on Washington  “hayseed socialists!”
Wanted a public works program – Why?

78. Bryan’s “Cross of Gold” Speech - 1896
You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold!

79. Gold Triumphs Over Silver
1900  Gold Standard Act
Confirmed the nation’s commitment to the gold standard.
A victory for the forces of conservatism.

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81. TR as President - Corporations
Anthracite Coal Strike – 1902
Miners vs. owners
TR’s mediation - Significance?
Created the Dept. of Commerce and Labor in 1903 – Why?

82. TR as President - Corporations
TR as Trustbuster
Northern Securities Company
Elkins Act – 1903
Hepburn Act – 1906
Good trusts vs. bad trusts
Compared with Taft as a trustbuster
Taming the good trusts

83. Taft
Trustbuster
Compare with TR
Standard Oil broken up

84. Clayton Anti-Trust Act of 1914
Federal Reserve Act – 1913
Most significant economic legislation between the Civil War and New Deal
Established the modern Federal Reserve system
Clayton Anti-Trust Act of 1914

85. “Black Tuesday” October 29, 1929

86. Causes Buying on margin/ Credit structure
Overspeculation/ Unstable banks
Weakened Industries (Railroads, cotton)
Overproduction/ Underconsumption
Lack of diversification
Uneven distribution of income
Weak international economy
International debt
Hawley-Smoot Tariff 1930
This exacerbates the problem

87. Effects of the Depression by 1932
25% - 33% unemployment
About 25% of banks had failed
About 25% of farmers had lost their farms
Thousands of businesses failed
But, before the inauguration,
Congress passed bill to repeal prohibition
21st amendment ratified later that year (1933) by the states

88. FDR Begins Experimentation – First “Hundred Days” Fireside Chats
Relief, Recovery, Reform
– First New Deal
Banking Crisis
Banking Holiday
Off the gold standard
Emergency Banking Relief Act 1933
Home Owner’s Loan Corporation
Glass-Steagall Banking Reform Act 1933
Created the Federal Deposit Insurance Corp. (FDIC)
SEC - Securities and Exchange Commission
1934 – more reform of the stock market

89. Industry
Wagner Act – National Labor Relations Act of 1935 (2nd New Deal)
After NRA declared unconstitutional, this restored collective bargaining rights to unions

90. The Growth of Labor Union Membership, 1933–1946

91. Social Changes - Labor John L. Lewis Strikes
CIO
Strikes
US Steel
GM (sit-down strike)
Ford
Why did the biggest corporations finally yield to the unions? (Hint: what was the attitude of the federal government?)

92. Truman’s Domestic Policy
Taft-Hartley Act – 1947
Passed over Truman’s veto (how?)
No more closed shop
Added “cooling off” period
Strikes and John L. Lewis
United Mine Workers
Truman’s Response

93. 1950s Union Politics Labor Unions Merger of AFL-CIO - 1955
Jimmy Hoffa - Teamsters
Landrum-Griffin Act – 1959
Tries to reduce political influence of unions
1959

94. Economic Issues Union membership (35%) peaks in 1970 Inflation
Wage and Price Controls under Nixon
What happened?
Stagflation
Slowing productivity and rising inflation – a rare combination – will plague the Ford and Carter presidencies

95. Reagan’s Domestic Policies
Supply-side economics (Reaganomics)
Define
Trickle-down effect
Tax cut
More defense spending
Results (big deficits)

96. Social Trends – How has the workforce changed?

99. Slave-Owning Families (1850)
259,950
464,700
1,040,655
818,925
565,355
317,049
68,820