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.

Factors that Contributed to

GROWTH

1. LAND

2. LABOR

3. CAPITAL

4. TECHNOLOGY

5. ENTREPRENEURSHIP

• 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.