Transcript Economic Developments and The Growth of Industry

Economic Developments and
The Growth of Industry
Ben Katzman
Nick Perry
Economic Nationalism
• Movement to support growth of
economy—internal improvements,
protecting U.S. industry from European
competition
• Tariff of 1816—1st protective tariff, raised
tariff on certain goods to protect U.S
manufactures from British imports
Panic of 1819
 Second Bank of the
United States, tried
to control inflation by
tightening credit
 Nicholas Biddle
 State banks close,
unemployment,
bankruptcies,
imprisonment of
debtors
John Marshall and
Economic Cases
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McCulloch v. Maryland (1819)
– MD collecting taxes on 2nd bank,
unconstitutional to tax federal bank
– Federal laws supreme, tax outlawed

Gibbons v. Ogden (1821)
– Was NY allowed to grant monopoly to the
steamboat company on the Hudson even
though it violated a federal charter?
– Unconstitutional ruling establishes broad
federal control of interstate commerce
Westward Movements and
The Economy
• Economic Reasons to Move West
– Difficulties resulting from war and the
embargo cause people to seek fortune west
of Appalachians
– Farmers exhausted lands in Southeast,
sought new lands west
– Building of roads and canals, steamboats and
railroads made trip easier
– Cheap land attracts Europeans
Priorities of
Western States
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“Cheap money” (easy credit)
Land made available at low prices
Improved transportation
The Step-Stones of the
Industrial Revolution
 Population growth = more consumers and
buyers
 Transportation for transporting goods people
and raw material
 Roads
 Lancaster Turnpike, road in Philly
 Canals
 Erie Canal, connected west to eastern cities, NY
 Steamboats
 Robert Fulton, 1st voyage up Hudson in 1807
 Railroads
The Step-Stones of the
Industrial Revolution
Growth of Industry
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Mechanical Inventions
Eli Whitney
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Corporations for raising capital
Businesses allowed to sell stock to raise capital

Starts in NY, others follow ex.\
Plenty of capital to expand industry & transportation
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Factory system
Samuel Slater, cotton-spinning secrets from Britain
Using efficient factories to mass produce goods
Helped expand banking and insurance fields

Labor
Men going off to buy western land
Lowell mills recruit young women and children, others follow
Factories later use immigrant labor
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Unions
Protected workers of similar businesses from low wages, long hours, unsafe conditions
Found obstacles in creating these from immigrant replacement workers, state laws
outlawing them, and frequent economic depressions w/ high unemployment
Impeded by immigrant replacement, state laws, and economic depressions
The Market Revolution
Specialization
 Industrialism
 Modern capitalism
 Interdependence among people rises
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Economic and Social Mobility
 Real
wages improved
 Gap growing between very rich and very poor
 High economic opportunity, social mobility
common, but not to extremes
The Market Revolution
Industry by Region
Region
North Atlantic
States
Old Northwest
States
Southern States
Western States
Number of
Establishments
69,831
Number of
Employees
900,107
Value of
Product
$1,213,897,518
33,335
188,651
$346,675,290
27,779
8,777
166,803
50,204
$248,090,580
$71,229,989
The Market Revolution
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Industrial Northeast
– Organized labor and unions
– Urban life, 15% of people in cities by 1850, industry attracts
Americans from farms and immigrants from Europe
Agricultural Northwest
– 1830-1850 4 million immigrants, most sought opportunity
in Old Northwest farms or cities or the Northern Atlantic
factories
– Including a large amount of Irish immigrants due to the
potato famine
– New cities along busy waterways thrived as key
transportation pts
• Buffalo, Cleveland, Detroit, and Chicago—Great Lakes
• Cincinnati—Ohio River, St. Louis—Mississippi River
South
– Agriculture, King Cotton
• Cotton 2/3 of all U.S exports, tied southern economy to
Great Britain
Whites and Economic Status in the
South
 Aristocracy
Small elite group, had to own at least 100 slaves and
farm 1,000 acres
 Farmers
Held fewer than 20 slaves, worked several hundred
acres
Worked with slaves in field, produced bulk of cotton crop
 Poor Whites
Did not own slaves, ¾ of white population, subsistence
farmers
African-Americans and the
Economy
• Black slaves supported most of the labor in
the South
• The majority worked in the fields, but some
became experts in skilled crafts, while others
worked as house servants, in factories, or in
construction gangs
• Heavy capital investment in slaves for
southern planters
• Most blacks in the North, who were free,
were hired as strikebreakers in factories
Tariff of 1828
 Tariff of Abominations
 Used to protect burgeoning factories of New
England
 Hoping to promote American made
products
 Southern farmers were reliant on cheaper
imported goods
 Jim Calhoun, Jackson’s VP, criticized the
tax, resulting in a lower tariff
 NC, Calhoun’s state, threatens succession
to the Union
Compromise Tariff 1833
• Henry Clay compromises tariff to save the
Union
• Said duties on some products could remain
high while for other products they should
be gradually reduced
• none over 20% by 1842
• Passed, called the “Compromise Tariff”
• Tariff from then on depended on the
prevailing economic conditions
• Later led to realization of differences
between the North and South, NC leaving
the Union, and eventually the Civil War
Andrew Jackson and the Second Bank of
the United States
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Privately owned, still received federal deposits and
cushioned ups and downs of national economy
President Nicholas Biddle, arrogant man, accused of
abusing bank powers to serve interests of the
wealthy
Jackson denounces the private monopoly, “the hydra
of corruption,” vetoes bill to re-charter bank
Withdrew all federal funds, invested them in various
state banks “pet banks” with Roger Taney
Bad inflation resulted, specie circular instituted
The Panic of 1837
Bank notes lose value as result of specie
circular, land sales plummet
 Economy plunged into depression, bank
after bank shut down
 Whigs blame Democrats and laissez-faire
economy, not enough federal involvement
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Tariff of 1842
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Instituted by John Tyler w/ the votes of
Northern Whigs and Democrats
Maintained some tariffs far above 20%
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Essentially reversed Compromise Tariff
Satisfied Northern manufacturers
Infuriated Southerners and Westerners
Tariff of 1846
► Added
by Polk
► Slashed duties to the minimum necessary
for revenue
► This led to a loss of support from Democrats
Bibliography
• Amsco Textbook
• Enduring Vision Textbook
• Google