Transcript The Economic Rollercoaster and why it wasn’t that much fun!

Analyze the factors that caused periods of
economic prosperity and economic
depression from 1800 to the present
(1980) using specific examples to support
your response.
War, Overproduction,
Technological Boom,
Industrialization, Tariffs,
Overspeculation, etc.
Analyze the factors that caused periods
of economic prosperity and
economic depression from 1800 to
the present using specific examples
1800
to
1980
to support your response.
Panics: 1819,
1837, 1857, 1907
Depression of
1929
Wars
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Panics:
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1819 (p. 242-243; 258)
1837 (p. 289, 383)
1857 (p. 428-429)
1873 (ch. 24)
1893 (Ch. 28)
1907 (p. 695-696)
1970s (ch. 42-43)
Great Depression (ch. 36)
Booms
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Cotton Boom
Industrial Booms
Western Expansion
Technological
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Wars
› 1812 (ch. 11-12)
› Civil War (ch. 21-22)
› Spanish-American War
(ch. 29)
› WWI (ch. 33)
› WWII (ch. 37-38)
› Cold War(p. 903-910; ch.
41-42)
•Eli
Whitney in 1793
built the Cotton Gin,
•Cotton Industry is
highly profitable
•Increased the need
for slavery
•Led to textile
industries being built
in the North created
prosperity for the
whole nation
•Textile industries, in
turn, led to massproduction factories
like Eli Whitney’s
interchangeable
parts for Muskets
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First Nation Panic
Overspeculation of
Western land
Deflation and
unemployment
Loans from “wildcat”
banks were not paid
forcing the banks to
close
BUS looked at as a
powerful evil (farmers
perspective)
› Foreclosed
Mortgages
Debtors prison looked at
as inhumane: reform
movements
• Land Act (1820)
• First Railroad (1828)
• Mower Reaper by Cyrus McCormick (1830s)
• Erie Canal (and Steam boats)
• Creation of Millionaires due to industrial
expansion
• Widened gulf between rich and poor but also
created great prosperity
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Get rich Quick-ism
Overspeculation for
Canals, Railroads, Slaves
Borrowing Currency from
the “wildcat” banks for
Westward Expansion
Specie Circular
Bank Wars
Wheat crop failure raises
prices
Whig party created
• Independent
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Treasury (1840)
John Deere’s steel
plow (1837)
10 hr. days for
federal employees
(1840)
Clipper Ships (1843)
Telegraph by
Samuel Morse
(1844)
Sewing Machine by
Elias Howe (1846)
Cotton
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Psychological rather than economic
Incoming California Gold (Gold Rush)
= inflation
Crimean War (Europe) overstimulates
grain growth
Overspeculation of land and railroads
Over 5,000 businesses failed
(unemployment and hunger)
North is hard hit; South is saved by
cotton
Reforming farmers want free land in
the West
Tariff of 1857 reduced the tariff by 25%
Leads to the homestead Act
Republican Party aimed at farmers
rights
•The
Second Industrial
Revolution was taking
place during this time of
prosperity
•New Factories
• Sheltered by
protective tariffs and
high inflation prices
•More Millionaires
•Labor-saving production
•King Cotton “dethroned”
•New industry
•Jobs for women in place
of men
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Overspeculation of Industries
Banks give out too many loans
Civil War after affects
Greenbacks
Inflationary policies created
Temporarily dropped silver dollars
(brought back shortly)
Bank companies failed
Resumption Act (withdrawal of
greenbacks because they cause
inflation)
Contraction policy – brings up value
of greenbacks
Bland-Allison Act (1878): Treasury
receive $2 million of gold and silver
Trusts: vertical integration
•Expansion of Railroads
•Credit Mobilier
Construction Company
•Growth of Chinese
migration and labor
•Bessemer Process –
invention in the 1850s
•Big Trusts boosted Industry
temporarily
•Scandals
•Consumerism
•Inventions of telephone
and electric light
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Workers Striking (troops called against them)
Lasted 4 years
Hobos (tramps)
Overbuilding and overspeculation, labor
disorders, agricultural depression
European banks want American loans
Free silver agitation: Sherman Silver Purchase
Act and repeal of it (gold reserve dropped
bellow $100 million)
Federal government refused to help
Selling of government bonds
Banks lend government money
“Commonwealth Army”
Big business and courts allied
Wilson-Gorman Bill
•Big
Major Events
•Panama Canal (1901)
•Puerto Rico (1898)
•China (1899)
•Hawaii (1893)
•Philippines (beginning 1898)
•Cuba (1898)
•Roosevelt Corollary
•Spanish-American War (1898)
Sister
Policy
•Yellow
Journalism
•Increased
Trade (easier)
•Natural
resources
available
•Controlling
World markets
•Revenue
•Convenient
Military Bases
•Worldwide
ties
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Purely Economic Panic
Elkins Act (1903): began heavy fines
on railroad and shippers that used
special rebates
Roosevelt’s “trust-busting”: attack
on Northern industry
› Hepburn Act (1906): Severely
restricts free passes due to bribery
› Meat Inspection Act and Pure Food
and Drug Act (1906)
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Aldrich-Veerland Act (1908):
authorizes banks to issue
emergency currency
Caused government to “relax
assaults on the trusts”
Led to fiscal (money) reform
• During the war,
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American
industries and
farms produced
goods
New inventions
such as the radio
and cars
Created strong
Nationalism and
faith in the
American
Economy
Prohibition
Roaring 20s
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Credit
• People could now buy things without the money to buy it and
when post war economy declined the inability to pay with
actual money left businesses and banks struggling to make ends
meet.
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Overproduction of Goods
• Many people were also left without jobs because the surplus
meant there was no need for more goods to be produced.
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Stock Market Crash due to overspeculation
• Many people lost their money and were unable to get it back
after the value of their stocks dropped
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Tariffs
• The tariffs prevented foreign trade which prevented revenue
from an outside source and left the surplus in American with
nowhere for it to go.
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War Debts
• Britain and France refused to pay the debts to America because
they felt that the Americans did not deserve it.
•Truman
and Eisenhower Doctrines (Marshall Plan)
•Consumerism from new technology and modernism
•Younger men took over the political scene
•U.S. send a man into space (April, 1961)
•Formation
of
the CIA
•NATO
•Geneva
Summit Meeting
•G.I. Bill
•Need to
achieve
STABILITY
•Civil Rights
Movements
•Questioning
and
improvement of
education
Productivity gains slowed
 Work involved fewer skills because women and
teenagers were entering the workforce
 Decline in machinery investments
 Emphasis on the services rather than manufacturing
 Vietnam war drained tax dollars
 Oil prices rising
 Cost of living more than tripled
 No modernization of industries put America behind
the newer industries (Japan and Germany)
 Americans now have a sense of limit (they
understand that things cannot continue to grow
forever)
 Supply-side economics begins
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Reganomics
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Higher interest rates
 Lower union participation
 Trusts built up again
 Poor get poorer; wealthy get wealthier
 Economic Recession
 The Stock Market prospers (then crashes
once illegal traders are caught)
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Results
Supply-side economy
Cut taxes and all government programs
and spending
“Trickle Down”
Increased Military spending
DEREGULATE
Expanding business growth
Are there any questions or comments?