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Published byHillary Drusilla Pope Modified over 10 years ago
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U.S. Economic History
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Mercantilism Trade benefits Mother country Colonies supplied cheap raw materials Mother country provided expensive manufactured goods Lack of strict enforcement encouraged colonies to develop profitable trade by smuggling… Salutary neglect
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The Constitution: An Economic Document ( Federal Government’s Economic Jobs) Protect private property Regulation of interstate & foreign trade May tax imports (tariffs), but never tax exports Uniform currency Issue patents and copyrights
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Creation of a National Economy Hamilton’s Financial Plan Bank of the U.S. Tariff to protect infant industries Federal assumption of state debt →good credit Excise tax (on Whiskey…leads to Whiskey Rebellion) Decisions of the Marshall Court McCulloch v. Maryland- ok to use elastic clause (bank) Gibbons v. Ogden – federal regulation of transportation (interstate commerce) Dartmouth College v. Woodward- uphold terms of contract – not even gov’t can interfere
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Factors Encouraging Economic Growth in USA Resources/Land Capital to invest Labor Slavery Immigration – no restrictions until 1882 Completion of Transcontinental Railroad
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Business Consolidation (late 1800’s – early 1900’s) Proprietorships & Partnerships → Corporations Advantages of corporations: Rise of monopolies (pools, trusts, holding companies) Problems caused by monopolies: higher consumer prices; lower wages; poorer working and living conditions, widening gap between rich and poor, etc.
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Regulation of Business Interstate Commerce Act (1887) To regulate railroads Created Interstate Commerce Commission to enforce Sherman Anti-Trust Act (1890) To restore competition in all businesses in the form of a trust in restraint of trade
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Rise of Labor Unions Attempts to Organize Unions Knights of Labor (Powderly)-Skilled & Unskilled in same union American Federation of Labor (Gompers) – craft unions, “bread & butter unionism”, closed shop Early Strikes – Unsuccessful Haymarket Affair Homestead Steel Strike Pullman Strike Government Actions – Anti-Labor Use of federal troops Use of injunctions Use of Anti-trust laws against unions in restraint of trade
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Populism Problems of the Farmers Overproduction High operating costs (machinery, technology) Cycle of debt (mortgages, repay loans) Granger Laws States attempted to regulate railroads Supreme Court cases Munn v. Illinois Wabash v. Illinois Federal government passed Interstate Commerce Act
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Populist Party Platform Unlimited coinage of silver Direct election of US Senators Graduated Income Tax Government ownership of Railroads, telephone, & telegraph systems Election of 1896 McKinley v. Bryan “Cross of Gold” speech Significance of election?
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Progressive Era Reforms (1900 – 1920) Trustbusting To restore competition TRoosevelt made it popular Graduated Income Tax Fair – based on ability to pay Federal Reserve Act Manage nation’s money supply (interest rates, reserve requirement) Conservation of Natural Resources TRoosevelt – national concern to protect
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Propsperity of the 1920’s Mass Production (Age of the Automobile) Radio and Advertising →more uniform culture Buying on Credit – installment plan Supply-side Economics – “Trickle-down” Speculation in stocks & real estate
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Causes of the Great Depression Overproduction Underconsumption High tariffs Buying stocks on margin Unsound banking practices World-wide depression Crash of the stock market
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Effects of the Great Depression ↑ unemployment (25% +) Businesses closed People lost homes Hoovervilles, Hoover blankets, breadlines, soup kitchens President Hoover’s policies associated with worsening conditions (Bonus Army, lack of direct gov’t relief)
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The New Deal The 3 R’s Relief – to provide immediate help to stop suffering Recovery – to get economy moving in the right direction Reform – lasting changes so this would never happen again
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Lasting Effects of the New Deal Government responsible for “economic well- being” of U.S. Safety Net programs to prevent economy from total collapse Social Security Tennessee Valley Authority Federal Deposit Insurance Corporation (FDIC) Securities & Exchange Commission (SEC) to regulate the stock market
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World War II and the Post-War Prosperity War-time Economy US – “Arsenal of Democracy” Rosie the Riveter – role of women & minorities Rationing Post-War Prosperity Consumerism/Materialism The Marshall Plan – economic recovery of Europe Move to the suburbs
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The Great Society (LBJ – 1960’s) War on Poverty Medicare Federal Aid to Education Job Corps/On-the-Job Training
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Reaganomics (1980’s) Supply-side economics – “Trickle down” Deficit spending ↓ government regulation ↑ military spending ↑ national debt
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Shift to Service-Oriented Economy Fewer Manufacturing Jobs Closing of steel plants Robotics on the assembly line Need for educated, flexible workforce Computer Revolution Improved manufacturing techniques Access to databases Internet access
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Free Trade Agreements NAFTA (North American Free Trade Agreement) US-Canada-Mexico GATT (General Agreement on Tariffs & Trade) Attempt to reduce tariffs and promote trade on world-wide basis
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