13. Industrialization and emergence of the US as a world power (1870-1916)
Introduction
After the Civil War (1861-65), American industry had undergone a dramatic shift. Machines replaced hand labor as the main means of manufacturing, increasing the production capacity of industry tremendously. A new nationwide network of railways distributed goods far and wide. Inventors developed new products the public wanted, and businesses made the products in large quantities. Investors and bankers supplied the huge amounts of money that business leaders needed to expand their operation.
By 1913, the United States produced one-third of the world’s industrial output–more than the total of Great Britain, France, and Germany combined. The living standards and the purchasing power of money increased rapidly, as new technologies played an ever-increasing role in the daily lives of working- and middle-class citizens. Between 1870 and 1920, almost 11 million Americans moved from farm to city, and another 25 million immigrants arrived from overseas. By 1920, for the first time in American history, the census revealed more people lived in cities than on farms. Boom in the mining coal, iron and meat packing, oil, steel and railroad.
The industrial growth centered chiefly on the North. The war-torn South lagged behind the rest of the country economically. The country built up its military strength and became a world power.
The value of goods produced by American industry increased almost tenfold between 1870 and 1916. Many interrelated developments contributed to this growth.
Main factors behind the industrial boom
1. Inventions
Many earth-breaking inventions were made in this epoch of time (1870-1916), which changed the modes and means of production in the United States. Following inventions were made: typewriter (1867), barbed wire (1874), the telephone (1876), the phonograph (early form of record player) (1877), the electric light (1879), the radio in 1895 and the petrol engine car (1885). During 1890s, the phonograph (modern) , motion pictures and electric generator were invented thus contributing to modern household and the discovery of diesel engine was completed in 1897. All these inventions provided a tremendous boost to the industry in the United states.
2. Vast natural resources
The nation’s abundant water supply helped power the industrial machines. Forests (California and others) provided timber for construction and wooden products. Miners took large quantities of, petroleum, copper, coal and iron ore from the ground. With the annexation of new states and westward expansion, Industrial activity grew at a high pace. Especially the gold discoveries in California attracted a huge foreign investment (1846-1860).
3. Influx of immigrants and Labor supply
More than 25 million immigrants entered the United States between 1870 and 1916.They belonged to European countries i.e. Germany, the Netherlands, France, Ireland. Immigration plus natural growth caused the U.S. population to more than double during the same period, rising from about 40 million to about 100 million. Interestingly, they were all well educated and had the experience of European industrialization. Abundant labor supply ensured smooth economic growth and kept the competition alive among different corporations. American industrial tycoons harnessed the talent, knowledge and skill of these immigrants to expand and modify industry in the country.
 |
| Immigrants standing on a station |
4. Distribution and communication
In the late 1800’s, the American railway system became a nationwide transportation network. The total distance of all railway lines in operation in the United States soared from about 14,500 kilometers in 1850 to almost 320,000 kilometers in 1900.
A high point in railway development came in 1869, when workers laid tracks that joined the Central Pacific and Union Pacific railways near Ogden, Utah. This event marked the completion of the world’s first transcontinental railway system. The system linked the United States by rail from coast to coast. Mining companies used them to ship raw materials to factories over long distances quickly. Manufacturers distributed their finished products by rail to points throughout the country. The railways became highly profitable businesses for their owners.
 |
| During 1900s |
In 1876, Alexander Graham Bell invented the telephone. These developments, along with the telegraph, provided the quick communication that was vital to the smooth operation of big business.
5. Improved enterprise structure
As the railroad was the first big business in America, it introduced a new model for the functioning of an enterprise. American railroads were private rather than public. Huge capital was needed to finance railroads. To deal with such a situation, the businessmen introduced the concept of sale of stocks and bonds to raise funds. They were the first to develop a flow of operating statistics used to control the traffic and also to evaluate the performance of the firm. The production, marketing, purchasing, finance, engineering and research were incorporated in business strategies.
Other two giants were Andrew Carnegie (Steel industry, 1873) and John D. Rockefeller (Standard oil company, 1885). The duo spearheaded the campaign of industrial expansion and transition with a great zeal and prudence.
6. Investment and Banking
The business boom triggered a sharp increase in investments in the stocks and bonds of corporations. As businesses prospered, people eager to share in the profits invested heavily. Their investments provided capital that companies needed to expand their operations.New banks sprang up throughout the country. Banks helped finance the nation’s economic growth by making loans to businesses.
7. Government policies
Benign government policies also contributed a great part in the robust economic growth. Less tariff, free trade, free lands and also encouraged the people to build more and more lands. Congress had subsidized the construction of rail roads. Congress repealed the wartime income tax law and removed many taxes on coal, iron corporations.
Comments
Post a Comment