Evolution of the American Economy: Land, Labor, and Industry in the 19th Century

1. Possible essay topics • Strengths and weaknesses of the American economy • The future of USD as a global currency • Is the double deficit of the American economy sustainable? • Future of American economy – prosperity or collapse? • Lessons from the Great Depression (1929-33) • The role of entrepreneurship in the economic success of the USA • American health care reform – is Obamacare successful? • The role of innovation in the American economy

2. TheRiseofanEconomicPower – US Economy in the 19th century – I. doc. Ing. Tomáš Dudáš, PhD.

3. USA – A new nation state • The Thirteen Colonies began a rebellion against British rule in 1775 and proclaimed their independence in 1776 • Americans in the Thirteen Colonies demanded their rights as Englishmento select their own representatives to govern and tax them • The 1783 Treaty of Paris represented Great Britain's formal acknowledgement of the United States as an independent nation. • The original 13 member states - Delaware, Pennsylvania, New Jersey, Georgia, Connecticut, Massachusetts, Maryland, South Carolina, New Hampshire, Virginia, New York, North Carolina, Rhode Island • 1789 – new constitution (federation state)

5. Westwardexpansion (1789–1849) • 1803 – Lousiana purchase • From France for 15 million USD • It doubled the territory of the USA • 1819 – Treaty with Spain • Florida • 1845 – Texas joins the USA • Texas became independent from Mexico in 1836 • 1846 – Border treaty with Britain • Oregon country

6. 1848 – Mexicancession • After a warwithMexico USA gainedwhatistodayCalirornia, Utah, Nevada, part ofWyoming, Colorado and New Mexico • 1853 – Gadsdenpurchase • FromMexico • 1867 – Pruchaseof Alaska • FromRussia • 1898 – AnnexationofHawaii • 1899 – AnnexationofPuertoRico

8. Division of the land • By 1853, the land area of the USA was 7,6 million km2 • Two thirds of this land was still empty and in the public domain • The government had a plan of land disposal, but nothing went according the plan • Land speculation and corruption were common

9. Basic population data between 1790 and 1860

10. Basic population facts • By 1860 the population of the USA exceeded that of United Kingdom and from the European countries only France and Russia had larger populations • The population growth was approximately 3,3 % from 1790, which meant that the population doubled roughly every 23 years • Very high fertility – 55 births per 100o persons (15,7 in 1993) • Very young population – in 1820 the median age was less than 17 years • Plentiful land • Rural/urban division

11. Immigration before 1860 • Policy of unrestricted immigration • Until the 1830s the number of immigrants was not really significant • 1821-1825 – annual average number of immigrants 8 000 • 1826-1830 – annual average number of immigrants 20 587 • Series of poor harvests and the failure of potato crops in Europe • 1831-1835 – 50 498 • 1836-1840 – 69 330 • 1841-1845 – 86 067 • Huge inflows of immigrants between 1845/1850 – 1,4 million people and between 1850/1857 2,2 million people

12. Immigration - sources • The first upsurge came from the British Isles • Famine in Ireland (more than 1 million dead in the 1840s) • Between 1846-1855 approx. 1,3 million Irish entered the US officially • The events of 1848 created a new wave of immigrants • Nearly 1 million of German speaking immigrants • Harvest failures

13. Labor data • In 1860 the US labor force numbered 11 million (35 % of the total population) • Approx. 79 % of these (58 % free and 21 % slave) worked in the agriculture • In 40 years, the proportion of the agriculture was cut in half

14. Transportation and urbanization • Government improved transportation for the new settlers • Turnpikes - intercity toll roads (27 800 miles in 1820) • Not very profitable business – profit rate of3-4 % • Canals – great canal building era between 1815 and 1843 • PPP projects • First success – Erie Canal in 1825 • Steamboats • Mississippi, Ohio and Missouri rivers • 817 steamboats in operation in 1860 • Railroads • Total investment in railroads up to 1860 was more than 1 billion USD

17. Slavery • The enslavement of Africans in the USA began in 1619 at Jamestown • Black slaves were servants for life, their children were born into slavery • 1780 – nearly half a million of slaves concentrated in the South • Expansion of slavery in the 19th century • Production of cotton • By 1860 most slaves were freed in the North and in the Middle colonies, leaving the South the major user of slaves

19. US Civil war 1861-1865 • The divisions on slavery became fully exposed with the 1860 presidential election • Lincoln, (Republican), won with a plurality of popular votes and a majority of electoral votes. Lincoln, however, did not appear on the ballots of ten southern states: thus his election necessarily split the nation along sectional lines. • 11 states seceded from the USA and established the Confederate States of America • Northern leaders had viewed the slavery interests as a threat politically, and with secession, they viewed the prospect of a new southern nation, the Confederate States of America, with control over the Mississippi River and the West, as politically and militarily unacceptable. • January 1st 1863 - Lincoln's Emancipation Proclamation