ECONOMIC GROWTH 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 railroad subsidies, tariffs, and labor policies; and the expansion of the international market.

U.S. Government Pumps the Economy A. U.S. economy begins to grow after Civil War mainly due to production in Northern factories and building of Transcontinental Railroad B. U.S. government wants to encourage economic growth 1. Tariffs – tax on imports to protect U.S. businesses 2. Subsidies – government payments to private companies = RAILROAD business explodes!! 3. Open Immigration – immigrants provided a cheap growing labor force

Industrialization in U.S. Industrialization – move from an agriculture based economy to a mechanized (machine) economy. England, France, and Germany were already industrialized. To compete, the U.S. would have to do the same

Why the U.S. Industrializes Quickly A. Natural Resources 1. Land 2. Coal – replaces wood burning 3. Iron Ore – buildings, railroads, and eventually the ability to make STEEL! 4. Oil – lubricates machine parts and eventually provide FUEL for machines B. Technology 1. Steam engine is the power behind the Industrialization of the U.S. a. Engine for steam boats, locomotives, drilling machines, and oil rigs!

Effects of Tariffs POSITIVE Protects American businesses from foreign competition Allows American companies to make profits and hire more people NEGATIVE Makes prices of goods higher Makes factory owners wealthy while workers pay more for goods

Laissez-Faire Government A. “Laissez –faire” – policy of the government not getting involved in restricting business 1. FREE MARKET B. Many companies exploit their workers 1. Long hours, low pay, awful working conditions, no benefits C. Labor Unions 1. Workers begin to organize themselves to improve their pay, benefits and working conditions

Effects of Subsidies POSITIVE Generates money for American companies Government can pay private companies to accomplish projects Availability of cheap land NEGATIVE Leads to corruption between business and government Creates dependency by farmers on government help

Effects of Open Immigration POSITIVE Cheap labor force Large numbers of workers in factories and railroads NEGATIVE Lead to ethnic tensions between groups Emergence of city and gang bosses

Chinese Exclusion Act Chinese immigrants come to the Western U.S. mainly to work on the Transcontinental Railroad Once the railroad is complete, Chinese are unwelcome because they will take American jobs Chinese immigration to U.S. is closed

Governmental Actions Factor of ProductionGovernmental Actions Land Labor Capital ($$$) Protective Measures

Governmental Actions Factor of ProductionGovernmental Actions Land1. Promoted Westward Expansion 2. Land Grants and Cheap Land 3. Expansion of International Trade Labor1. Open immigration for cheap labor 2. Policies that supported big business owners 3. Anti-union and Anti-strike Capital ($$$)1. Reorganized banking to increase financial security 2.Provided cheap loans to businesses 3. Offered subsidies to industries Protective Measures1. Raised tariffs to protect American industry 2. Chinese Exclusion Act protects American jobs in West 3. Government/Military help to stop labor union strikes