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UNITED STATES HISTORY AND THE CONSTITUTION . South Carolina Standard USHC-4.2 Mr. Hoover, Abbeville High School. Economic Boom.
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UNITED STATES HISTORY AND THE CONSTITUTION South Carolina Standard USHC-4.2 Mr. Hoover, Abbeville High School
Economic Boom • During and after the Civil War, the United States entered a period of rapid economic growth (boom) that was due in part to government policies that contributed to changes in the factors of production in the United States.
Economic Growth • Factors that contribute to economic growth are land which includes its natural resources such as timber, coal and iron ore. • Other factors are labor, capital, technology and entrepreneurship. • This economic growth in the United States began in the first half of the 19th century. • It was fostered by both government actions and changes in each of the factors of production.
Entrepreneurs • It is important to emphasize the role of government in providing the business environment in which entrepreneurs could be successful because it is a common misunderstanding that government impedes economic growth and that American individualism was sufficient to promote America’s emergence as an industrial power in the late 19th century.
National Bank • The national bank had provided needed capital and at the same time somewhat regulated lending. • Expansion to the West promoted by government actions through purchase, treaties and war opened up a vast region rich in natural resources (land) such as coal and iron ore.
The government was also instrumental in removing or controlling the Native Americans who threatened to impede access to these resources.
Courts Support Business Growth • The growth of business was supported by court decisions that upheld the sanctity of contracts [Dartmouth v. Woodward] and passed patent laws that protected the rights of the inventor (technology).
Government Regulations • The national government regulated interstate commerce in Gibbons v Ogdenand protected infant industries with a protective tariff. • Pre-Civil War technological changes such as the invention of the steam engine and its application to the steamboat, oil drilling and the railroad should also be reviewed.
Subsidies • Policies to foster economic growth were promoted by the Republican Party during and after the war. • Congress passed laws which stimulated westward expansion by offering subsidies in the form of land grants to railroads and by giving free land to settlers.
War, Good for Business • The reorganization of banking fostered a more secure financial climate. • War contracts further stimulated the economy. • In the postwar period, the United States government provided protection for settlers in the West against the Native Americans.
Chinese Exclusion Act • Tariffs were raised throughout the period to protect industry from foreign competition. • Labor policies promoted the interests of business. • The government generally promoted open immigration that supplied a ready force of workers. • The Chinese Exclusion Act was passed after the completion of the railroad when these workers were no longer desired.
Unions and Strikes • As workers began to organize into unions and strike to protect their interests, the government took the side of management and sent federal troops to break up strikes and to jail strikers. • These actions supported the interests of Big Business rather than the workers whose wages were depressed by the supply of unskilled immigrant workers and whose organization into labor unions was undermined by government actions.
High Tariffs • Although high tariffs protected the jobs of workers, protective tariffs did not support the interests of consumers because prices of goods were kept artificially high. • Industrial growth led to a surplus of products that could not be purchased by American consumers and became available for export.
Expansion of International Markets • These surpluses prompted the United States government to support the expansion of international markets through foreign policy initiatives that expanded United States’ territorial influence, protected American investments abroad and promoted trade.
