USHC Standard 4: The student will demonstrate an
understanding of the industrial development and the
consequences of that development on society and
politics during the second half of the nineteenth and the
early twentieth centuries.
USHC 4.2: Analyze the factors that influenced the
economic growth of the United States and its
emergence as an industrial power, including the
abundance of natural resources; government support
and protection in the form of railroads subsidies, tariffs,
and labor policies; and the expansion of international
markets.
Main Idea: During and after the Civil War, the
United States entered a period of rapid
economic growth (boom) that was due in part to
government policies that contributed to changes
in the factors of production in the United States.
What is…
• Capital: the wealth, whether in money or
property, owned or employed in business by an
individual, firm, corporation, etc.
• Entrepreneur: a person who organizes and
manages any enterprise, especially a business,
usually with considerable initiative and risk.
When did economic growth in the U.S.
begin?
• Economic growth started in the first
half of the century
How did the economy grow?
• It was fostered by both government
actions and changes in each of the
factors of production
• The government provided the
business environment in which
entrepreneurs could be successful
What else has the government done
to increase economic growth?
• (USHC 1.6) The national bank had
provided needed capital and at the
same time somewhat regulated
lending
• (USHC 2.1) Expansion to the West
promoted by government actions
through purchase, treaties and war
opened up a vast region rich in
natural resources such as coal and
iron ore.
• (USHC 2.1 and 4.1) The government
also removed and/or controlled
Native Americans who threatened to
impede access to these resources
• The growth of business was supported by court
decisions that upheld the sanctity of contracts
(Dartmouth vs. Woodward) and passed patent laws
that protected the rights of the inventor.
• (USHC 1.7) The national government regulated
interstate commerce (Gibbons vs. Ogden)
• (USHC 2.3) The national government protected
infant industries with a protective tariff
Government policies to promote economic growth:
• Policies to foster economic growth were promoted by the
Republican Party during and after the war.
• Congress passed laws which stimulated westward expansion
by offering subsidies in the form of land grants to railroads and
by giving free land to settlers
• The reorganization of banking fostered a more secure
financial climate
• Tariffs were raised throughout the period to protect industry
from foreign competition.
• Labor policies promoted the interests of business
• The government generally promoted open
immigration that supplied a ready force of workers
• As workers began to organize into unions and strike
to protect their interests, the government took the
side of management and sent federal troops to break
up strikes and to jail strikers
How did these government policies affect workers and
consumers?
• The government’s actions supported the interests of
“Big Business” rather than the workers whose wages
were lowered by the supply of unskilled immigrant
workers and whose organization into labor unions was
undermined by government actions.
• High tariffs protected the jobs of workers, but
protective tariffs did not support the interests of
consumers because prices of goods were kept
artificially high
MAIN IDEA: Industrial growth led to a surplus of
products that could not be purchased by American
consumers and became available for export. These
surpluses prompted the United States government to
support the expansion of international markets
through foreign policy initiatives that expanded
United States’ territorial influence, protected
American investments abroad and promoted trade.
USHC Standard 4: The student will demonstrate an
understanding of the industrial development and the
consequences of that development on society and
politics during the second half of the nineteenth and the
early twentieth centuries.
USHC 4.3: Evaluate the role of capitalism and its impact
on democracy, including the ascent of new industries,
the increasing availability of consumer goods and the
rising standard of living, the role of entrepreneurs, the
rise of business through monopoly and the influence of
business ideologies.
MAIN IDEA: Capitalism has played a central role
in the development of the United States and the
American economy since the first settlers
landed.
What is capitalism?
• Capitalism is the economic system that is
characterized by private ownership of property
and the use of that property to make a profit for
the individual or the corporation acting as an
individual.
• Capitalism supports the democratic ideal of
individual freedom and opportunity
CORPORATION
a company or group of people authorized to act
as a single entity (legally a person) and
recognized as such in law.
Corporations in America:
• Corporations promoted early industrialization before
the Civil War by raising capital through the sale of stock
to invest in large scale business ventures
• In the post Civil War period, corporations became larger
and more powerful through mergers and monopoly and
had a greater influence on the economy, politics and
government policy
• Critics began to question the compatibility of large
unfettered corporations and the rights of workers and
consumers in a democracy
Corporations in America
How did the railroad affect American industry and
economy?
• New industries rose to prominence in the post
Civil War period
• The railroad was the economic engine that drove
the economy
• The establishment of several transcontinental
routes helped to unite the country and promoted
economic growth and the development of a
national market
The industry that creates others!
• The industry’s need for steel rails, wooden
railroad ties and railroad cars and its ability to
transport goods contributed to the growth of steel,
the lumber, the meat packing, and the coal
industries and many others
• The railroad brought new settlers through
aggressive advertising and land sales and provided
farmers access to markets
• New towns grew along its routes and older ones
were able to specialize in particular products
MAIN IDEA: Capitalism led to competition.
Think Vanderbilt!
What kind of problems did competition cause?
• Competition caused some railroads to be forced
to merge with others to survive
• When the cut-throat competition drove some
railroad companies into bankruptcy the national
economy was thrown into depression
• Unrestricted competition led to economic
uncertainty and periodic depressions and
eventually to a public call for government
regulation of monopolistic practices
• Concerns of the public over the political power
of the monopolies later contributed to the
Progressive Movement
• Monopoly: exclusive control of a commodity
or service in a particular market, or a control
that makes possible the manipulation of prices.
Concerns over monopolies vs. pro-business
ideologies:
• Public concerns over monopoly were offset by the
popularity of pro-business ideologies
• Captains of industry justified their sometime use
of cut-throat practices with ideologies of Social
Darwinism and laissez-faire capitalism
• Social Darwinism: survival of the fittest
• Laissez-faire: little to no government intervention
in business
Response to America the Story of Us:
Cities
1. How did the video illustrate the idea of the
“rugged American spirit”? Explain.
2. How did steel lead to development of cities
and skyscrapers? Explain.
3. Do you think America is better off because of
industrial development, or would it have
been more beneficial to remain largely
agricultural? Explain your answer!!