Economic Developments and The Growth of Industry Ben Katzman Nick Perry Economic Nationalism Movement to support growth of economyinternal improvements, protecting U.S. industry from European competition Movement to support growth of economyinternal improvements, protecting U.S. industry from European competition Tariff of 18161st protective tariff, raised tariff on certain goods to protect U.S manufactures from British imports Tariff of 18161st 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 McCulloch v. Maryland (1819) McCulloch v. Maryland (1819) MD collecting taxes on 2nd bank, unconstitutional to tax federal bank Federal laws supreme, tax outlawed Gibbons v. Ogden (1821) 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 Cheap money (easy credit) Cheap money (easy credit) Land made available at low prices Land made available at low prices Improved transportation 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 Mechanical Inventions Mechanical Inventions Eli Whitney Corporations for raising capital Corporations for raising capital Businesses allowed to sell stock to raise capital Starts in NY, others follow ex.\ Starts in NY, others follow ex.\ Plenty of capital to expand industry & transportation Factory system Factory system Samuel Slater, cotton-spinning secrets from Britain Using efficient factories to mass produce goods Helped expand banking and insurance fields Labor Labor Men going off to buy western land Lowell mills recruit young women and children, others follow Factories later use immigrant labor Unions 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 Specialization Industrialism Industrialism Modern capitalism Modern capitalism Interdependence among people rises Interdependence among people rises Economic and Social Mobility Economic and Social Mobility Real wages improved Real wages improved Gap growing between very rich and very poor Gap growing between very rich and very poor High economic opportunity, social mobility common, but not to extremes High economic opportunity, social mobility common, but not to extremes The Market Revolution Industry by Region The Market Revolution Industrial Northeast 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 Agricultural Northwest 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 ChicagoGreat Lakes Buffalo, Cleveland, Detroit, and ChicagoGreat Lakes CincinnatiOhio River, St. LouisMississippi River CincinnatiOhio River, St. LouisMississippi River South South Agriculture, King Cotton Cotton 2/3 of all U.S exports, tied southern economy to Great Britain 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, of white population, subsistence farmers African-Americans and the Economy Black slaves supported most of the labor in the SouthBlack 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 gangsThe 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 plantersHeavy capital investment in slaves for southern planters Most blacks in the North, who were free, were hired as strikebreakers in factoriesMost 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, Jacksons VP, criticized the tax, resulting in a lower tariff NC, Calhouns 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 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 Bank notes lose value as result of specie circular, land sales plummet Economy plunged into depression, bank after bank shut down Economy plunged into depression, bank after bank shut down Whigs blame Democrats and laissez-faire economy, not enough federal involvement Whigs blame Democrats and laissez-faire economy, not enough federal involvement Tariff of 1842 Instituted by John Tyler w/ the votes of Northern Whigs and Democrats Maintained some tariffs far above 20% 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