Exam 1 Study Guide | American Economic History 1860 to Present | ECON 4076, Study notes of Economics

Download Exam 1 Study Guide | American Economic History 1860 to Present | ECON 4076 and more Study notes Economics in PDF only on Docsity! 1. Degree to which economic conditions during Reconstruction were the result of the Civil War and the degree to which they were due to other influences. They felt as if the issues between the South and the North were unfixable. Although both sides had a lot to gain by continuing to allow slavery, certain issues arose. The South was in a good economic condition at the time. Although the war stimulated the economy, it diverged the path they were already on. They spent more time and money building military supplies rather than railroads and buildings. Ssmi145 2. Civil War’s effect on American economic development: stimulation, retardation, or no significant influence Pre-war economic growth was larger than post-war economic growth. The war stimulated the North. Almost all large wars will ultimately stimulate the economy. It actually retarded the industrial economy because rather than making industries and railroads, they spent more time and money making cannonballs, guns, and other military equipment. Although the Civil War did stimulate the economy, it diverted the path they were already on. It took about 10 years to get back on that path. Damages from Civil War retarded South economy because they lost money on military supplies and not on industries and railroads. Also when they allowed the slaves to fight the war for freedom, it raised questions: if they could fight for freedom, then what is the war for? The war devastated the South. Poverty was widespread. They also experienced 40% loss in draft animals which hindered the region heavily and made farming more difficult. Also the loss of slaves hurt their assets and their work supply. 4. Conditions of agriculture in the U.S. during the 1865-1900 period and a determination of the validity of farmers’ complaints. America thought they had a cotton “leash” on Great Britain. This caused Britain to start stock piling cotton in the event of a panic. This also led them to finding another route to cotton: India. Reconstruction era led to scientific agriculture: the study of agricultural efficiency. They began to study what worked better and when. Most southern states’ had a chair in Chemistry, which was agricultural farming. Attempted to find out what made for disease and insect resistant crops. Its not that success/southern independence was a bad idea, but rather that the North was much more powerful than ever thought. DeBow’s review stated that their mechanized farming and industrialization was more advanced that thought. The article “in lieu of labor” stated that they needed to start using machinery and industrialization and move away from slave labor, much like the North. Cotton and sugar were the most used, and this would eventually be the areas with the most technological advancement. Mechanized cotton picker was a dream and in 1922 it came to life, though not very well. It was unsuitable for Alabama, Mississippi, etc. cotton. 5. FARMER’S GRIEVANCES DURING 1865-1900 The agricultural conditions in the Post-Civil War era were made up of increased industrialization and declining emphasis on an agricultural based economy. Farmers felt the burden of foreign completion and the commercialization of the US society. They became dependent on creditors, merchants, and railroads to operate efficiently. This allowed for these commercial agencies to take advantage of the farmers as they had no alternative source for funds or transportation. This period of Farmer’s unrest led to the development of the Grange and the Farmer’s Alliance, which were groups made up of farmer’s to collectively voice their opinions on conditions relevant to them. Although some of the complaints were unfounded according to historical research, their impact was great as it eventually led the Federal Government to become more involved in the regulation of private industries and enact the Interstate Commerce Act in 1887, which gave the Interstate Commerce Commission regulatory oversight over long distance rail shipping. The railroads took advantage of farmers’ distress. Even though prices went down, they did not charge less. Banks also gouged them as interest rates were far lower in the East than in the West and South. Also, the money supply was unfairly distributed; this is to say that it was done by intent. The treasury insisted on backing on only gold although no populist was on the gold standard. They didn’t realize that farmers’ were destined to be screwed. 6. The money question in the U.S., 1861-1900: its politics, including pertinent legislation; volume, composition, geographical distribution, and backing of the currency; impact of monetary policy on economic growth and development In order to stimulate the economy, they issued $450 Million Greenbacks that were to be retired soon after. This caused inflation and made prices go up. North inflation went up 24% while South inflation went up 1,000s%. Domestically everyone used greenbacks, but internationally, they wanted their money in gold. In 1879, they finally backed greenbacks in gold after the economy was finally sound. People living in the South and West wanted a bi-mettalistic system in which money was backed by both silver and gold. The Coinage Act of 1873, also known as “Crime of 1873” demonetized silver. This was called a “crime” because miners had just struck silver in the west, which would now be worth close to nothing. Lenders wanted only one metal to be backed so that they could increase interest rates as needed. Specie Act of 1875 mandated the redemption of greenbacks in only gold at face value on Jan1, 1879. This now put the US on the gold standard and enflamed silver interests and inflationists. One small victory for silverites, however, was the Bland-Allison Act of 1878. This bill restored the standard silver dollar’s full legal tender. It required that the secretary of treasury to purchase silver bullion at market price, which was higher than its metallic value. They would have to purchase $2 to $4 million monthly. Because of the low price, it because a subsidiary coin. This proved to be inconsequential and had no effect. Because no foreign country would take anything not backed by gold, government wanted only one metal system. However, southerners and westerners wanted bi-metal because of the silver findings they would have. 7. SOURCES AND MAJOR INSTANCES OF TECHNOLOGICAL CHANGE IN THE U.S. DURING 1860-1900 There were many technological changes during the 1860-1900 that greatly affected the U.S. economy. For instance, the invention of the tractor in 1902 changed the way work was done on all farms. It increased plowing 2-3 times. The tractor freed up much of the labor force by performing tasks that were once done by hand such as plowing. Tractors were also used for transportation which lessened the need of for draft animals. This era also saw the development of the Cotton Gin in 1922 and Flour Mill. Inventors such as Samuel Slater (brought mental blueprints from Europe and designed machinery), Oliver Evans, Eli Whitney (invented cotton gin and gun musket) and Herman Hollerith all developed