Industrialization: Economic Growth Factors at the Turn of the Century

Industrialization:Economic Growth Factors at the Turn of the Century

Free Enterprise: An economic system with as little regulation as possible, especially from the government

Protective Tariffs: Taxes placed on imports to make foreign products more expensive than those made domestically

The Role of the Government(2 Definitions)

Throughout the 19th Century, low taxes and very few government regulations allowed entrepreneurs and producers to grow American businesses with very little hindrance.

Free Enterprise: Low taxes and Regulation

Protective Tariffs

Tariffs on foreign goods were very high in the late 1800’s.

These taxes had to be paid when products were first brought into the country.

Anyone who wanted to sell these foreign products in the U.S. had to raise the price in order to cover the cost of the tax. 1896, L.A. Times

This Act created tariffs that were as high as 49.5% on products such as wool and tin. This Act created the highest tariffs in U.S. history in order to protect American industries and support domestic growth.

The McKinley Tariff of 1890:

Some economists argue that tariffs hurt the U.S. economy.They argue that…

Tariffs protected inferior U.S. industries from competition

Tariffs helped protect monopolies that would not exist with foreign competition

Tariffs interfered with trade between nations and created reciprocal tariffs on U.S. goods sold in other nations.

Some economists also point out that states within the country didn’t set up tariffs to protect industries within their own borders.

Tariffs: Something to Ponder

(The Free Trade Zone Within)

Substantial Immigration

Immigration was not regulated heavily in the 1800s. Immigration rose to very high levels in the late 19th century.

Immigration: Source of Labor

The large number of people moving to the United States created a source of human power and creativity. Many immigrants were willinng to work for low wages allowing businesses to grow with small labor costs.

Immigration: Source of Customers

The immigrants also created a larger market for domestic businesses that might not have grown otherwise.

Geographic Growth and Abundant Resources

By the end of the 19th Century, the nation stretched from the Atlantic to the Pacific and from Mexico to Canada.

Each region of the country had different natural resources.

Businesses used available resources within the nation. This meant less reliance on

products or raw goods from other nations.

The size of the nation also created a “Free Trade Zone” within the country.

Businesses could use natural resources from one part of the nation to create products that might be sold in another region- all without government interference.

Free Trade: Within the U.S.

Transportation Networks

At the turn of the century, railroads connected many otherwise remote areas. This made transportation cheaper and opened up new areas for farming.

Communication

Another key factor in economic growth at the turn of the century was communications including…

Morse Code and telegraphs

The invention of the telephone

Intercontinental telegraph cables