The Us Rises In Power

The US rises in power

23/03/2007 09:00:00

1876 fair in Philadelphia • The Us was becoming an industrial society • By 1900 the Us vaulted ahead of western European nations • Changes in manfufacturing, mining, agriculture, transportation, and communication International trade between 1820-1920 • us comparative advantage had changed from 1820 to 1920 away from agricultural production in favor of manufacturing . The US also saw a steady decline in in import of finished manufactures and an increase in finished manufactured exports. This was because of strong industrial development and Yankee innovation o however during the same time exports, were only about 6-7% of GNP. In colonial times exports were roughly 15-20% of GNp the reason was because:  as the percentage of GNP it decreaed, but it was actually increased o The same held true for imports • Independence ratio is exports+imports divided by GDP o assume price level is constantin 1825 exports= $400 imports $500 GNP= $3,500 ….900/3500= ,25 • even though international trade was increasing in real terms it was decreasing in percentage terms • this being said in certain industries exports and imports figured more prominently o ex: 20% of agricultural production went to export imported items included diamonds, coffee tea cut glass and high graded china Industrial deelopement • The us owned its industrial development fgorwth to six factors o abundance of natural resources  coal iron, timber, petroleum, waterpower this allowed for greater self sufficiency o large and growing labor pool  arge flock of European immigrants  15 million from 1890 to 1914 o expanding national markets/growing urban population

birth rates were brutally high increased aggregate demand devoured goods technological innovations  the kerosene industry and inventions such as the harvester and combine helped foster a firm agricultural base in the US  Bessemer process developed in the latee 1850s made steel production possible blast air through molten iron burn off carbon resulting in more uniformed and durable quality steel o Te government during this time promote economic growth at all levels, federal, state, and local  Gave land away way below market prices  gave commitment to private property  businesses faced few legal social barriers  peace and stablitiy    o new

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 o Entrepreneurs flourished at this time  Captains of industry  Assumed risk!  Age of robber barons Jp morgan----finance Andrew Carnegie----Steel John D. Rockefeller----Oil William Kelly----Steel Because of all these facotors GDP grew between 1865-194 gew a 4% a year in real terms

23/03/2007 09:00:00

23/03/2007 09:00:00