Industrialization, Labor, and the Agricultural Revolution in the United States

Posted on Aug 6, 2024 in History

Definition and features of industrialization:

Industrialization→ substitution of power driven machinery for human labor on large scale factories that made use of mass production.

Consumer goods→ goods that do not generate more revenue after purchase→ one cycle of profit

Capital goods generated additional wealth for the economy when they were purchased→ multiple cycles of profit

As the economy industrialized→ shifted emphasis away from consumer goods and toward capital goods→ increased economic growth and capacity.

Mechanization was the act of substituting human or animal labor for the use of machines→ requires standardization & specialization

Standardization→ all parts used to make something needed to be the same and have a standard

Specialization→ separation of production into a series of simple, specialized tasks (worker focuses on doing 1 task repeatedly instead of making an entire product)

Mechanization led to:

Mass Production is the production of large amounts of products assembled through mechanization

Mass Consumption was the immense use of goods and services in response to mass production

Mass production paved the way for mass consumption because of its ability to create a mass of products that were cheap, allowing the general public to have access to these common goods. Driven by:

Department stores allowed consumers to see products outside the shop in the display window and then have products set up within the store for consumers to see.

Mail order catalogs were first introduced when Montgomery Ward first saw the potential in purchasing in bulk directly from manufacturers. Richard Sears later adopted this same business practice.

Enabled by Rural Free Delivery – rural customers were now able to feed into the economy with catalogs that presented a wide array of products.

Chain Stores→ Multiple of same store- consumers can get same quality/reliability of product/store no matter where they are

Consumer loyalty helps businesses survive competition

Advertising targeted groups of buyers to gain their loyalty to the products

Provide source of revenue for newspapers

~Help other businesses expand

Rising productivity was the key to economic growth→ drives down prices

Productivity→ rate at which goods and services are produced,

Output per worker per hour/day→

Deflation occurs (prices fell) → Real wages (value of a wage in terms of how much can be purchased) rose

Railroads were first big business

Stimulated the economy in two major ways:

Initial stimulus: key industries such as oil, steel, coal needed to be developed to build railroads→ economic growth through hiring of laborers & engineers to build railroads

Expansion of railroad makes transportation throughout the US faster, cheaper→ firms able to sell products across the nation

Pioneered Managerial Revolution:

Operations divided among different departments→ coordinate together to make the RR operate efficiently (Specialization)

Lines of communication coordinated tasks and operations

Cost accounting→ track of costs in each department to assess performance and make future decisions based assessment

Standardized methods of operation:

Establishing standard time zones

Standard track width to maximize RR safety & efficiency

Methods of cooperative billing

Communications Revolution:

National Market Economy required better system of communications to manage larger businesses & farther business operations

Growth in size of business also necessitated better record-keeping

Numerous inventions enabled businesses to meet these needs–typewriter (1868), stock ticker (1870), telephone (1876), mimeograph (1876), cash register (1879), dictaphone (1885), adding machine (1885)

Bell’s telephone invention (1876) spread with long distance lines to create the national market economy→ links nation into a single business/market economy.

Other innovations-the rapid pace of invention-rural free delivery, refrigerated railroad cars, typewriter and other business machinery

National Market Economy→ economy in which the entire nation is available as a marketplace to buy and sell goods

Created by linking the nation into a single network of transportation (railroads)→ business can access markets throughout the nation more easily

Aided by Communications Revolution→ businesses can communicate beyond geographical limits (intercontinental business relations) → direct & monitor operations by using telegraph & telephone

As business expand→ more competition (business collide as they try to expand into same markets) → businesses implement methods to mitigate competition (secure investments) → gain monopolies in industries, forcing “inferior” business to consolidate or go bankrupt.

Banks encouraged consolidation to secure investments→ push business they invested in that were going bankrupt to consolidate so they do not lose their investment

State Government Helped Businesses Grow (Such as RRs) by allowing private businesses to incorporate:

Capitalization→ Raise funds through sales of shares of stocks to investors

Limited liability→ separation of business & individual→ shareholders not responsible for debts of bankrupt corporation

Perpetual life→ corporation could not die with its owners (b/c it was not tied to an individual)

Professional management→ stockholders not responsible for operation of corporation→ hire a professional to manage the corporation

Out of the competition, there is pressure to reduce competition through business consolidation

JP Morgan played a crucial role in facilitating railroad mergers and consolidation (finance capitalism — pouring money into mergers to profit long term).

Andrew Carnegie & Dominance of Carnegie Steel:

Beginnings in RR:

Andrew Carnegie was the son of Scottish Immigrants, and as a teenager, he developed skills became the personal telegrapher to Thomas Scott, supervisor of Pennsylvania Railroad Western Division. He then spent 12 years learning the railroad business and took advantage of investment opportunities. Visited England after becoming a millionaire, discovered the Bessemer Process (produced higher quality steel at a lower cost), and started a steel factory in Pittsburgh afterward.

Success of Carnegie Steel:

Steel was in demand because it carried locomotives better than iron

Carnegie’s success came from:

His contacts and expertise in the RR business proved useful

His business management:
cost accounting, in which the cost and profits took care of themselves (also cut price of rails in half); used vertical integration, in which where he supplied his own products needed for his principal products to lower cost and gain competitive advantage (transportation with his own ships and negotiating rates with RRs). Allowed him to cut costs below his competitors.

Eventually went on to make millions, and sold Carnegie Steel to JP Morgan for millions of dollars, went into philanthropy and penned the “Gospel of Wealth”:

He gave out his money in various philanthropic projects such as building 1000s of libraries, donating to medical research, and building hospitals and schools

in his book Gospel of Wealth, he said that wealthy men had an obligation to user their superior wisdom and talents that led to their wealth and preside over its distribution and use rather than allow those to did not work for it to gain it (inheritence). Wanted to inspire the “self-made man.”

Came to control close to 80% of the steel industry at the height of its influence — used this leverage to threaten to undercut competitors’ prices and buy them up, which caused C.S to grow even bigger — MONOPOLY

John D. Rockefeller and his dominance in the oil industry

invested in oil refineries during the Civil War and devoted himself to operating the largest of Cleveland’s thirty oil refineries.

Oil required less capital than steel. Crude Oil (Petroleum) was useless until it was refined into machine oil and kerosene (gas lamps). Focused on crude oil.

Reasons For His Dominance:

Cost Accounting: accurate to the decimal point, consolidated companies into Standard Oil, 40 to 39 barrell stoppers. Small savings multiplied and cut costs which gave him an edge against competitors.

JDR negotiated special rates for large shipments from the railroads in return for agreeing not to do business with RR’s competitors; in return, JDR got rebates off of official, advertised rates.

Established kickbacks, where the RR would do business with JDR’s competitors and charge them higher rates while giving JDR a percentage of the profit.

Standard Oil– gained control of a single product by eliminating other competitors in the market–horizontal integration. Also used vertical integration by making their own barrels, warehouses, etc.

JDR wanted to centralize managements across states but legislation prohibited it, so he made a new form of business organization through the trust.

manipulated the trust, whose original purpose was to protect people’s assets, into allowing companies to be controlled by a Board of Trustees. Stockholders traded their stock certificates for trust certificates that allowed them to get a share of the WHOLE company. Standard Oil Trust was formed.

After encountering gov’t opposition, JDR found an alternative in NJ, which allowed companies to own property in other states. So, Standard Oil became a holding company, whose sole business was to control other companies, trust certificates changed back into stocks.

Journalists such as Ida Tarbell exposed JDR’s sinister motives and actions after witnessing his monopolistic efforts. As a result, the public began to turn on trusts and their abusive powers. In response, Congress passed the Sherman Antitrust Act, which outlawed pools and trusts that constituted agreements to restrict competition.

Supreme court used the 14th Amendment to prevent the government from enforcing the Sherman Anti-Trust Laws by declaring that the state could not deprive any person (corporations) without due process. Procedural due process was the means to protect individuals from arbitrary government action, and it was applied to corporations.

Social Darwinism was used to justify the triumph of wealthy captains of industry and big businesses

It originally came from Charles Darwin’s theory of natural selection, in which he discovered that traits developed through genetic mutation that give a survival advantage to animals amongst a changing environment make give animals the strongest possibility of surviving and passing along those same traits.

William Graham Sumner advocated for Social Darwinism, which borrows Darwin’s idea of competition for survival in nature as justification for unequal outcomes of competition among people in the economy – arguing it would be “unnatural” to interfere with the progress of the survival of the the fittest.

Critics of Social Darwinism came up with their own thought, Reform Darwinism, which sought to justify society’s interference of the wealth and preferences of the rich. Thought that the poor preferred that they distribute their wealth in form of higher wages.. Frank Ward saw that intelligence was man’s distinguishing trait that invalidated laws of evolution on humans. It was up to man ro decide to intervene even if it meant slower economical or technological progress.

At the same time that industrialization made a new class of entrepreneurs, it shifted the means of livelihood for Americans from farms to mines and factories—created problems for industrial workers.

Industrial workers: urban working classes (below mgt. Level) – esp. Factory workers

Came from farms to cities

Immigrants from Europe (lesser extent, China)

Sought better standard of living and economic opportunities

Greater social mobility in America

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Issues For Workers

Even though real wages of workers rose, wages were not enough to support workers’ families→ Women and children in the family had to supplement this income.

Uneven distribution of income→ A growing wealth gap between the rich and the working wealth–growing concentration of wealth at the top.

Work hours were exceedingly long (avg. Of 60 hours a week per worker)

Unhealthy and dangerous working conditions in mines and steel mills

Workers faced competition for jobs from an influx of immigrants. These immigrants drove down wages and made it more difficult to make any changes in wages, hours, or working conditions (immigrants were also used as strikebreakers)

Mechanization & mass production→ skilled workers became wage workers→ loss of status: worker’s worth determined by wage instead of product + reduced independence/freedom among workers.

Depersonalized aspect to the boss/worker relationship→ loss of personal identity on the job (being treated like a machine).

Work became more repetitious and boring

Public and gov’t opposition to unions, which were a vehicle of improvement for workers→ Unions associated w/ controversial political movements (Communism, Socialism, Anarchism)

Labor Union Movement→ workers banded together and sought strength in numbers by forming two kinds of unions:

Trade/craft unions – admitted only those skilled workers who shared knowledge of a particular kind of work

Industrial unions – represent all workers (both skilled and unskilled) who worked in the same industry

All unions sought collective bargaining rights (agreement from employers to recognize and negotiate with the unions)

Basic Obstacles to Union Movement:

Cheap immigrant labor

Public backlash against violent union strikes

Gov’t support for businesses

Major Strikes

Common Pattern: conflicts breaks out over wage cuts→ strike begins → once violence occurs in the midst of the strike, government sends in troops, allowing businesses to replace striking workers with strikebreakers.

Great Railroad Strike of 1877: Railroad workers strike to protest wage cuts during a depression→ strike spreads throughout country, strikers damage property→ state militias brought in to control strikes & force workers to return to work (fails) → fed troops sent in to restore order→ workers replaced by strike

Homestead Strike: Carnegie Steel ends local labor unions (to cut costs & reduce union power) → Carnegie gives task to Henry Clay Frick→ fortifies & prepares for strike (hires Pinkertons to serve as security) → Pinkertons fight workers over control of Homestead factory→ Pennsylvania governor brings in National Guard to reopen factory w/ strikebreakers

Carnegie was originally a big supporter of labor unions and championed the right of laborers—disavowing the use of strikebreakers.

Pullman Strike (1884): Pullman Car Co. Announce wage cuts w/o rent cuts (Pullman provided housing for workers) → workers strike after having arbitration denied→ union members refuse to handle or pull Pullman train cars (boycott Pullman cars) → army sent to stop strikers from obstructing trains (under guise of strikers stopping postal service)

FARMERS & THE AGRICULTURAL REVOLUTION

Farming expanded and farmers began growing an exponential amount of grain, cotton, and other basic products that corresponded with a national population that was doubling and moving toward cities because of several basic factors:

Expansion of the agricultural domain into the West

spelled hardship for farmers in the East and the South because they could not compete with the virgin soil of the West

West quickly became the dominant producer of cotton and other products

Railroads facilitated shift to the west b/c they offered better transportation

Homestead Act of 1862 helped expand territory

For a small fee, settlers could get up to 160 acres of land after living on it for at least 5 years

Downside: 160 acres was not enough for the West

Removal of Indians into reservations

Application of machinery to the process of farming

mechanization of farming allowed farmers to feed more city people and produce a surplus which helped even more westward expansion

Increased productivity (rate of farming) so that farmers produced much more

Application of the barbed wire

Machines: reaper & thresher, the combine, the cotton gin

Application of science to the processes of farming + gov’t policies

Application of scientific knowledge helped find better methods of farming and increasing crop production

Crop rotation

Discovery of winter wheat (allowed wheat to be grown year-round)

Morrill Land-Grant Act

provided an endowment for agricultural and industrial colleges in states that were pushed to research scientific farming.

Hatch Act

Provided funds for the establishment of experimental farms

PARADOX:

agricultural production was thriving and farming was expanding westward but by this time, many farmers had been forced off the land, their incomes were shrinking in proportion to the entire economy, and farming was seen to be in a serious crisis.

Problems of Farmers

Nature

Soil of the South had been exhausted by continuous use and lack of crop rotation

Insect plagues and plant diseases hurt the crop yield of many farmers

Droughts and windstorms led to soil erosion

Overproduction

Mechanization of agricultural processes -> production of larger number of crops -> falling crop prices

Market forces

Farmer was selling his produce in an open, unprotected market in competition with individuals from different countries, which led to lower prices for his goods.

Farmer was buying freight, clothing, machinery, etc. In a protected market where tariffs protected the sellers and resulted in higher costs for the farmer.

Debt

A majority of farmers were in debt because they needed machinery and/or more land

Overproduction (and the resulting deflation) meant that the value of debt grew larger–they needed to produce even more to make enough money to cover the debt.

Negotiating w/ Big Businesses

Individual farmers didn’t have bargaining power against large grain-storing and railroad companies

Were charged discriminatory prices and rates

Lack of gov’t protection

There were high tariffs that increased prices for farmers

Deflationary monetary policies that kept prices for farmers’ goods low

Hurt farmers in debt

legislators were more inclined to protect the interests of big businesses rather than farmers—granted millions of acres to RRs rather than farmers

Farmers Organize & Protest

Farmers, motivated by the various struggles, began seeking ways to come together and resolve issues

Formed the Grange (nationwide social gathering) that broke down social barriers in the agrarian world and built solidarity.

Built a political standing and passed laws known as the Granger Laws that protected interests

Farmers’ Alliances (Northern & Southern) organized co-ops to try to get better deals in marketplace but faced opposition.

Out of these two organizations came populism:
A movement of protest by farmers against an economic and political system that extracted profits for big businesses while encouraging crop reduction in the face of expanding debt.

The Populist Party formed and endorsed the following policies:

Bimetallism – increase the money supply by coining both gold and silver

Gov’t ownership of railroads to ensure that deals are made fairly

Subtreasury plan to cope w/ overproduction surplus

8-hour day for industrial workers + support for unions; restrict immigration

Progressive income tax (to replace or lower tariffs)

Political reforms to strengthen control of of gov’t by people

Secret ballot, direct election of U.S Senators, primaries, referendums

In the election of 1892, PP wins 8.5% of the vote and a significant amount of electoral votes (22)

The depression of 1893 hits and people began resounding with their message even further. In 1894, Populists gain .5 million more voters.

Given their success, the election of 1896 is crucial to determining the future trajectory of the PP

Republicans nominate William McKinley, who is a pro-gold candidates and opposes inflation of the money supply, supports high tariffs, and supports pro-big businesses.

Democrats nominate William Jennings Bryan–who has some Populist views–to try to get Populists to vote for him

Populists, at their convention, decide to sacrifice their identity as a unique third party and endorse a Democrat in order to have the greatest chance of securing a seat in the White House.

McKinley wins because workers are turned off by Jenning’s insistence on inflationary policies and raising the prices of crops.

The role of a third party in a two party system is to influence either one to pay attention to its views

THEODORE ROOSEVELT AND THE PROGRESSIVE MOVEMENT

Rise of The Progressive Movement

B. Origins/ Sources of Progressive Ideas

Populism (focused on political reforms in order to make govt more responsive to people and to give voters more control of the govt. Progressives borrow this from the Populist movement. ideas about giving people more direct control of government & of using government to regulate business)

Populism: A movement of protest by farmers against an economic and political system that extracted profits for big businesses from expanding crop production by farmers in the face of their mounting debts.

Muckrakers → Muckrakers were journalists who investigated & wrote about problems needing reform)

Christianity: “social gospel” movement (the focus of Christianity to spread the gospel–the good news–your faith saves you, you don’t have to be sinless, he did not have stop sinning, he did not have to be good, you just have to believe and embrace what Jesus had done for him, which is a ticket to Heaven) You do not just save their soul and abandon them. Don’t just save sous, feed their bodies, soup kitchens, salvation army, help them to get a job. Shift of an emphasis in the Churches that focused on evangelization and now that they are in cities, where there are growing problems, they see immigrants finding it hard to adjust to life in the city,so the Church is becoming open to helping people live their lives. In addition to the message, this is when the salvation army was established. So you do not only give them the message, but also food, clothes etc.

Socialists’ (increase economic equality, which means gutting capitalism since it involves private wealth and private property, so if want to increase equality, you have to have government control the powerful companies so they can distribute wealth equally) (Progressives are sensitive to the criticisms Socialists make of the ills of capitalism so that becomes a stimulus to fix what is wrong with capitalism to save it ) criticisms of abuses of capitalist laissez-faire system (social darwinists position) influential in sparking reform to preserve capitalism

“Laissez Faire” is French for “leave alone” which means that the government leaves the people alone regarding all economic activities. It is the separation of economy and state. Let things happen in a competitive cycle.

Universities (source of expertise to study problems & propose solutions)- new disciplines popping up in higher education.

Designed like a finishing school, finish off your character and finetune your intellectual and moral understanding.

By 1880’s and 1890’s, new disciplines are popping up in higher education (economics, engineering, technical trades, sociology, these are subjects that were relevant to the kind of knowledge and skill needed during the Progressive Movement to solve problems. During Progressive Movement, tap the experts, bring them into government, tap their knowledge to resolve issues of society.

Proposals of the Populist Party

Bimetallism

using gold (was scarce) and silver to increase money supply (Increasing the money supply helps the farmers because the value of money goes down and prices go up. The shortage of money increases the value of debt and increasing money supply, lowered the value of their debt, it’d be easier to pay them off) (use silver to expand money supply)

2. Government ownership of railroads

(govt own and operate the railroads, run them not for profit, but as a public service with fair rates for everyone)

3. Subtreasury plan to cope with overproduction surplus (p.503)

(The Grange and Farmers’ Alliance tried to organize cooperatives to farmers had problems with buying, shipping, and selling crops, so a cooperative would band farmers together and sell all their crops together to get a better price or buy supplies in bulk together to get a lower price. THe counter resistance of the business made the private efforts to form private cooperatives did not work. So the subtreasury plan is a proposal for the govt to be their cooperative they would do so together to get a better price, but they encountered business that did not want to cooperate. Subtreasury plan is for the government to be their co-op because these companies cannot resist the government; so the govt would gather grain and store them in federal warehouses during periods of low prices and the govt would lend low-interest rates to farmers in the meantime to be repaid crops were sold. This would allow farmers to sell crops when prices were highest. Money supply would increase farmers, the value of debt goes down and then loans would be paid.

4. 8-hour day for industrial workers & support for unions;

restrict immigration (done to draw the vote of workers, once the Populist win, then the workers will benefit, farmers are self-employed (they do not need unions, immigration affects workers, not farmers) , work from sunrise to sundown or as long as they have to harvest crops. This has nothing to do with farmers, Populists want to reach to workers to get more votes and possibly form a coalition (farmers + workers) that could win)

5. Graduated income tax

(goes after the wealth to replace or lower tariffs (which farmers did not like because it increased the price of things they had to buy, it also increases the price of things workers had to buy, but since it is the only source of revenue for the govt, it has to be replaced with something else) (when enacted, most people paid nothing, but as govt got bigger, the tax dropped those earning less since only taxing the rich could finance the entire govt)

6. Political reforms to strengthen control of government by the people

(secret ballot, direct election of US senators, primaries expands it to the public, before candidates would just go to the convention filled with professional politicians and not enough of the people to be elected)

Election of 1896

Populist join the Democratic Party and support William Jennings Bryan

Republican William McKinley wins

Role of third party in a two-party system (doesn’t usually replace major party, but influences one or both of them to pay attention to their issues, and perhaps do something to fix them)

Progressive Reforms under President Theodore Roosevelt & President Woodrow Wilson

Teddy Roosevelt believed that the federal government should act as a referee on behalf of the public interest

His reform programs came to be known as “Square Deal” because it was even to all sides involved

Changes in Big Business:

believed in the natural economic efficiency of big businesses, but was aware of the fact they hurt some public interests in the process of growing

came to be known for trust busting: preferred regulation — distinguished between “good” and “bad” trusts — selective prosecution under the Sherman Anti-Trust Act (44 in all) to make examples of “bad” trusts:

i.E: Northern Securities Company was the first to be broken up — Roosevelt prosecuted JP Morgan, James J Hillman, and EH Harriman over significant control of railroad rates.

After prosecuting Northern Securities, Roosevelt convinced Congress to create the Department of Commerce and Labor, and within it, the Bureau of Corporations endowed with the authority to investigate corporations and issue reports on the activities of big business — he believed that this was the most effective way to keep them from abusing their power.

Additionally, Roosevelt passed the Hepburn Act (1906) to strengthen the once weak Interstate Commerce Commission (ICC) and give it the authority to set railroad rates.

Railroad companies were initially skeptical of this but later began working with the ICC to set rates that limited competition and prevented new competitors from entering.

Changes in Labor:

Roosevelt regarded himself as the nation’s head manager and wanted to prevent conflict between groups — put this into practice in the Coal Strike of 1902

When the United Mine Workers went on strike, Roosevelt urged the unions + owners to accept arbitration — settlement imposed by a third party.

When mine owners disagreed, Roosevelt ordered to have the army to run the mines

This established the federal gov’t as a broker between powerful groups in society

Changes in Other Parts of the Economy

responded to appalling descriptions of conditions in the meatpacking industry and protected consumers by passing the Meat Inspection Act, which required federal inspection of meat sold through interstate commerce.

conservation (planned development — not wildlife preservation) of natural resources; used executive order to set aside 150 million acres.

Causes of Great Depression

Uneven distribution of wealth (the wealthiest minority owned a majority of the national income)

Decline in key industries (coal, railroads, automobiles, electrical appliances)

Underconsumption (not enough people are buying in the economy)

Excessive stock market speculation (Which put banks at risk, they lost money when the stock market went down)

Federal Monetary Policy – Too “loose” (easy credit-low interest rates) in 1920s, feeding speculation (encourage people to buy stock with borrowed money) ; then too restrictive (“tight” – higher interest rates, making it harder to borrow money) after onset of Depression, deepening it and making recovery more difficult

The New Deal’s Response to Depression – relief & reform of the economy

F.D.R & The New Deal (1933-38)

Open to all ideas since America was in a major crisis, the worst crisis since the Civil War

Three Goals of the New Deal: RELIEF (aid to needy, the unemployed; aid those hurting in the economy), RECOVERY (efforts to stimulate the economy; grow the economy up again, reduce unemployment), and REFORM (changes to the system to prevent future problems) – all together labeled the “New Deal”

Programs related to the relief and recovery initiatives of the New Deal disappeared after the Great Depression passed. The Reform were the most permanent (almost) and lasting achievement of the New Deal.

2. Examples of RELIEF & RECOVERY:

Federal government helps people get jobs, now this allows them to buy more things

FDR closed the banks ( all banks would be closed for an extended “bank holiday,” three to five days and during that time federal bank examiners would inspect books of these banks to see if they were going bankrupt or if they were sound banks that could be trusted. Once it was determined that a bank was sound, it would be allowed to reopen. This allows people to feel trusts banks once more because reopened banks have a stamp of approval which meant you would not lose your money. Within days of reopening the banks, the money flew back into the banks because people back money back in and what was left of the banking system was working again.

Civilian Conservation Corps (CCC) to create jobs for unemployed young men (civilian army, working for the government, signed up to CCC and you were assigned a particular project to work on; (the person has money spend and contribute to the economy)

Dozens of agencies pouring out billions of dollars into the economy to generate recovery; all kinds of occupations for people who could not find work in private sectors are now working

3. Examples of REFORM:

Glass-Steagall ACT created the F.D.I.C (Federal Deposit Insurance Corporation) and regulated banking system to prevent risky investments

Changed the rules for banks

Regulated how banks could invest. Separated banks that specialized in investment and commercial banks, who specialize in loans. Commercial banks could not play the stock market like investment banks. Commercial banks would be much safer for consumers to use.

Reforming the stock market: Securities Act/Securities and Exchange Commission (SEC) in 1934

SEC – government regulatory agency that enforced rules in how stocks are traded. Buying on margin is not allowed, fixes what made stock market speculation excessive.

Wagner Act (1935) – (National Labor Relations Act) : supported rights of unions to collective bargaining & outlawed blacklisting

Reforms to do something about the uneven distribution of income and the key to do that is empowering unions to get higher wages for American workers.

Outlawed blacklists

Put federal govt behind the right of workers to form unions Unionized workers rise into middle class, expansion of consumption, reduction in gap

If a union organizer comes to workers to form a union and if a majority vote of workers vote to have a union, then there is a union. The company that has to accept the union and the workers are in a better position to negotiate wages and if they strike, no blacklisting. From 1930 to 60, unionized workers are rising into the middle class, which means expansion of consumption, reduction the gap in the way wealth is distributed, which the economy needs to keep on rolling.

Social Security Act (1935): provided old-age pension funds, system of unemployment insurance & aid to dependent children and the disabled (beginning of federal welfare programs)

Unemployment insurance

Bottom did not fall out when the economy was in trouble. Safety nets were set in place. Elderly people got social security checks. Federal welfare programs established to help the needy.

Woodrow Wilson

Tariff

Underwood Tariff – new federal income tax (16th amendment)

Introduced graduated federal income tax (targeting wealthy, excluded the poor) to compensate for lost tariff revenues

Lower tariffs (only source of income for the gov’t so a suitable replacement is needed to finance the gov’t)

Trusts

Federal Reserve System

In response to need to make credit more available & to enable government to adjust amount of money in circulation

Federal Trade Commision

Regulate big business as opposed to breaking them up

Clayton Anti-Trust Act

Tougher on big business and explicitly exempt unions from the court using it against them

NEW DEAL REFORMS

Progressive reform beginning of new role for federal government: increased regulation of economy & responsibility for “general welfare” issues (protecting the public interest)

however , it was only a beginning, since business had strong influence over the regulation & the commission’s enforcing them – Supreme Court also remained reluctant to allow expansion of federal government’s role

Though progressives were not embracing expansion of civil rights, the NAACP was formed during this era to begin that fight

Unit 4: Emergence of U.S. As World Power

TWIN MOTIVES OF US FOREIGN POLICY

Idealism

National Self-Interest

Traditional United States Foreign Policy

Isolationism

Stayed out of political affairs + military conflicts of other countries

Freedom of trade

Monroe Doctrine (1823)

United States would not tolerate any further interference with the independent nations in the western hemisphere

Favored democracy over monarchy

Strongly opposed to colonialism

U.S changes foreign policy (late 19th century) for multiple reasons→ Dual Motive (Expand power & influence to benefit U.S + Share superior way of life to benefit others) → Self-interest & idealism

Economic→ access foreign markets to expand trade→ need for raw materials & need to invest surplus capital

Force→ U.S intimidates Japan into beginning trade relations

Feeling of Superiority→ Anglo-Saxonism (belief that English-speaking nations were superior in character, ideas, and systems of gov’t) + American Exceptionalism (belief that the U.S is exceptional/great because of democracy, economic opportunity, and freedom of religion)

Export/share/give “superior way of life” to help other “inferior” nations, even if it requires force→ Justify imperial expansion (spread power=spreading good things like democracy)

Christian Missionary Activity→ Evangelical missionaries sought to spread Christianity, acted as agents of commerce (both intentionally & unintentionally)

European Imperialism (Colonialism) → European nations had already been expanding overseas for centuries, U.S needs to expand to compete (even at risk of confrontation→ abandonment of isolationism)

Block further expansion of European Imperialism

Eg.: European colonization of Africa from 1880-1900

Expansion of U.S Naval Power→ overseas bases needed

U.S. Naval buildup→ by 1900, U.S Navy was 3rd largest (after England & France)

Captain Mahan’s influential book Influence of Sea Power Upon History, published in 1890

Spanish-American War in 1898

Reasons for U.S intervention in Cuba:

Sympathy of American public for Cuban people suffering at the hands of the Spanish oppressors (idealistic)

Yellow Journalism- sensationalized, exaggerated, and (sometimes) falsified journalism in order to grab people’s’ attention (make more $$$)

Business Interests & Investments in Cuba→ $50million worth of American investment in Cuba→ secure investments so as not to lose money (conflict makes investments insecure)

Many American businesses in Cuba invested in railroads (+ other infrastructure) & sugar plantations

Cuban guerrillas intentionally damaged American railroads, sugar plantations in order to have Americans intervene (possibly to protect their investments)

However, a majority of American businesses owners did not support the decision to go to war→ possibly to minimize risk (economic interest was not the primary reason for going to war)

Business interests become more of a priority after the war

Monroe Doctrine→ removal of Spain’s colonial control

U.S newspaper media pressure→ yellow journalism

The explosion of the U.S.S. Maine was the spark to the war

Maine sent to bring Americans in Cuba back to the mainland (just in case)

Maine explodes, Spanish accused→ mines in Havana harbor

However, recent investigation suggests that the explosion was caused by an internal issue

U.S goal in the war: free Cuba from Spain→ Cuban independence

Cuban independence from Spain

Teller Resolution→ U.S asserts that it had no intention of annexing Cuba

Protect U.S economic interests

Outcome of U.S intervention in Cuba→ acquisition of new territories (Puerto Rico, Guam, Samoa, & Philippines [for $20million]); U.S withdrawal from Cuba in 1902 free Platt Amendment is incorporated in new Cuban constitution

Platt Amendment was to preserve Cuban independence & maintain order + acquisition of a naval base @ Guantanamo Bay→ Self-interest: make sure that the U.S is the only non-Cuban power with influence in Cuba

No treaties w/o U.S approval

U.S gets Navy base

Acquisition of Panama Canal (in 1903, canal completed in 1914)

Strategic considerations: U.S now a 2 ocean power→ without a canal, it would be necessary to have 2 navies + facilitation of trade

Maneuvering for canal’s location led to U.S support for Panamanian “revolution” to gain independence from Colombia→ U.S reorganized independent Panama in 1903, 12 days after, sign a treaty for U.S construction of canal across Panama & U.S control of canal “zone” for annual fee “in perpetuity” (forever)

U.S. Dominance in the Caribbean

Roosevelt Corollary (to the Monroe Doctrine) → (logical) extension of Monroe Doctrine, declaring that the U.S would work to extend its influence & intervention throughout Latin America (in order to keep European nations out) → Police the Americas

Interventions in Dominican Republic (1905 & 1916), Haiti (1915), Nicaragua (1912-1933), Panama, Cuba, Mexico

Potsdam Conference (July 1945): Truman, Churchill/Atlee, & Stalin (Truman was not as willing to compromise after receiving news of success of the atomic bomb)

Truman & Stalin clash over Soviet refusal to allow free elections in Poland→ Stalin installs friendly communist gov’t

Unable to agree future status of Germany→ agreed to divide Germany into 4 zones of occupation (U.S, British, French, & Russian) → capital of Berlin also divided (Berlin was inside Soviet zone)

Stalin refuses to honor promise to uphold free elections in Eastern Europe→ Communist gov’ts installed

Churchill coins phrase “iron curtain” → line of Communist control in Eastern Europe

Reasons for the Cold War:

Conflict of Economic/Political Systems: capitalist democracy vs. Communist totalitarianism

Conflict of National Self-Interest: U.S wants to develop economies to trade vs. Soviet desire to defend itself from future invasions from Western Europe

“Global Shrinking” (result of technology) → worldwide markets become more intertwined, technology allows information to be transferred over larger distances & faster→ Conflict betw. U.S. & USSR becomes a worldwide conflict

U.S. Cold War Strategy:

Theory of Containment→ “you do not have to actively defeat & suppress communism, you simply have to wait for their system to collapse while yours prospers” → No need to fight, only prevent spread of communism & wait for systems to fail

Restrictions on Cuban debt

U.S allowed to intervene to protect Cuban independence -or- to maintain order

Debate over the Philippines

Pro-imperialist arguments (both idealism & national self-interest):

Prevent European imperial expansion (idealism + self-interest) → ensure a different power doesn’t take away Filipino independence

Prevent a European power from taking the Philippines for itself

Access resources + markets in the Philippines so that the U.S is more powerful than other powers

Spread democracy (idealism) → help the Philippines

Philippines needed as a U.S naval base & to expand trade in Asia (self-interest)

Anti-imperialist arguments:

U.S should not be a colonial power (idealism)

Annexation not an option for the Philippines since they cannot be settled & Americanized → in the past, American expansion would assimilate & eventually incorporate lands in the West, this could not be done for Philippines because:

It is far away (different continent)

Had a tropical climate (Americans not accustomed to)

Was densely populated (could not displace Filipino people)

Colonialism violates our principles (idealism)

If Filipinos are not satisfied w/ American control and want to expel American power, but the U.S stays, it violates our own Declaration of Independence

Some (like Andrew Carnegie) argued that annexation would damage U.S economic interests

U.S annexed the Philippines→ fight Filipino rebels seeking independence until 1902, when rebellion is quelled→ U.S begins a gradual process to transition the Philippines to popular internal self-rule & eventual independence after WW2

1907: Philippines given elective assembly

Open Door Policy in China (1899-1900) → European powers with control of parts of China are to allow any nation to do trade in the areas they control

Sphere of Influence- area where a country controls economic development

European powers give an ambiguous response to the Open Door Policy→ only willing to agree if all other powers agree

Secretary of State Hay obtains cooperation by having the U.S declare that it assumes responses were agreements→ assert interests

Theodore Roosevelt’s Foreign Policy in the new century (1901-1908)

T.R becomes president upon McKinley’s assassination in 1901

Use of U.S influence in Asia to preserve “Balance of Power”

Roosevelt intervenes to negotiate a peace settlement ending Russo-Japanese War in 1905 to preserve “balance of power” betw. Russia & Japan→ ensure that all powers are equally powerful so that no power is able to dominate the others

Everyone expected Russia to win because Japanese (Asians) were inferior→ Japan wins because industrialized

T.R sends naval fleet on world tour to flex U.S military muscle

Acquisition of Panama Canal (in 1903, canal completed in 1914)

Strategic considerations: U.S now a 2 ocean power→ without a canal, it would be necessary to have 2 navies + facilitation of trade

U.S. Dominance in the Caribbean

Interventions in Dominican Republic (1905 & 1916), Haiti (1915), Nicaragua (1912-1933), Panama, Cuba, Mexico

Nationalistic Power Conflicts

Nationalism: feeling of superiority over other nations→ existing nations compete w/ each other for power + people of a common culture existing within a different nation (empires) desired to break free & have a common gov’t

France vs. Germany over Alsace-Lorraine

When German kingdoms were united by Prussia, German obtains Alsace-Lorraine from France

Both nations wanted resources in Alsace-Lorraine (which was rich in coal)

England vs. Germany over naval power

Britain had largest navy in the world, accessed worldwide empire by ship→ Germany’s primary access to the sea was in waters around Britain→ as Germany’s navy grows larger, clash betw. England & Germany

England & France share a cultural bond (both were democracies) in contrast w/ Germany (ruled by Kaiser)

European nations competed for colonies→ scramble for land in Africa (holdings by Britain, France, Belgium, Germany, Portugal, Italy, & Spain)

Imperialism increases nationalist rivalry because colonies become another “spoil of war”

Weakening of Empires threatened by nationalism

Decline of Ottoman Empire in the Balkans→ leaves conflict betw nationalists & imperialists

Austro-Hungarian Empire threatened by nationalism(Serbia) in the Balkans→ South Slav ethnic group looks to be united as its own nation (Serb nationalists)

Entangling Alliances→ as powers became involved in the conflict, their allies also got dragged in

Triple Alliance: Germany, Austria-Hungary, Italy

Triple Entente: Britain, France, Russia

Arms Buildup (Militarism)

Naval arms race betw. Britain & Germany

Industrialized countries w/ colonies in 19th century equipping armies to project power & defend interests

Trigger for WWI: Assassination of Archduke Ferdinand by Serb nationalist Gavrilo Princip

Allied Powers vs Central Powers

Allies: Britain, France, Russia, Italy (after being offered land in Austria-Hungary by the lies)

Central Powers: Germany, Austria-Hungary, Ottoman Empire, Bulgaria

U.S. Response to War (Initial Neutrality)

President Woodrow Wilson proclaims American neutrality

Consistent w/ traditional U.S. Isolationist approach to European conflicts

U.S. Economic interests→ free trade w/ ALL parties

Causes for U.S. Entry into WWI:

Dominant cultural (& ethnic) ties w/ England

Many Americans sympathize w/ England (& thus, Allies)

Growing economic ties to Allies:

Exports:

Before War→ Roughly Equal

To England & France (1914)= $753 million [combined]

To Germany (1914)= $345 million

During War:

To England & France (1916)= 2.75 billion

To Germany (1916)= $29million

Loans:

To Allies (as of April 1917)= $2.3billion

To Germany (as of April 1917)= $27million

German Submarine (U-Boats) Warfare

Sinking of Lusitania→ French passenger liner containing ~130 Americans

Technical violation of U.S. Rights as neutral nation

Germany’s dilemma→ after initially sinking ships, Germany backs off (Sussex Pledge) → then resumes submarine warfare, gambling on the U.S being unable to mobilize into Europe fast enough to prevent an Allied collapse

War seen as conflict betw. Democracy & Autocracy (gov’t by a single person w/ unlimited authority) → Idealism

Wilson declares it a war to make the world “safe for democracy”

Russian Revolution in March 1917 ends rule by Czar, after which Russia drops out of war

Germany & Austria-Hungary were not democracies→ ruled by a single leader (Germany ruled by Kaiser)

Wilson’s desire for U.S to exercise influence over postwar world→ The shape of the future world would be decided by the victors of war at the peace conference→ Wilsonian idealism: “war to end wars”

Winning side would have the power to redraw the map of Europe

Paris (Versailles) Peace Conference→ Reshaping the world

Wilsonian Idealism: Foreign policy w/ a moral mission

Extend democracy in world

Oppose & unravel colonialism

Secure world peace

Secure free trade

The Fourteen Points→ Wilson’s Blueprint for Peace Settlement

(1) Open Diplomacy→ end to secret treaties

(2-3) Freedom of the Seas (no blockades or restriction of ships in international waters)& Free Trade (lower tariffs)

(4) Reduction of Armaments

(5) Decolonization of Empires

(6-13) Self-Determination for National Groups

(14) League of Nations

International assembly of nations for negotiation settlements of nations’ dispute & preventing future war or aggressions

The Paris Peace Conference→ Treaty of Versailles (1919)

Neither Britain nor France accepted Wilson’s idealism→ reject 14 Points

Military Dead:

US: 53,000

Britain: 900,000

France: 1.4million

Russia: 1.8million

Austria-Hungary: 1.1million

Germany: 2million

Wilson was willing to trade concessions on first 13 points to win an agreement to establish a League of Nations

Allies not interested in giving up control of colonies or following “self-determination” everywhere

Treaty of Versailles provisions:

France gains Alsace-Lorraine

Germany required to pay massive bill of reparations ($33 billion)

Germany accepts blame for war (“war guilt” clause)

Allied powers kept own colonies & would “administer” colonies of Central Powers (on behalf of League of Nations)

Dissolution of Austria-Hungary into 2 nations: Austria & Hungary; Austro-Hungarian Empire separated into new Nations

German Empire broken into separate nations→ Eastern Germany becomes Poland

Allies agree to establish a League of Nations

Debate over Treaty of Versailles in the U.S.A → for a treaty to take effect, the Senate must approve the treaty

Many senators had reservations about the Treaty→ especially Article X (LoN members must defend other LoN members in case of invasions), which some senators feared could lead the U.S becoming involved in European conflicts

“Reservationists” → willing to support Treaty if it is amended that Congress decides if the U.S would “defend” (go to war) other countries

“Irreconcilables” → completely opposed to the Treaty (isolationists)

3rd group was willing to follow Treaty no matter what (loyal democrats)

Wilson refused to compromise→ looks to American people to help pressure Congress into supporting Treaty→ cross-country speaking tour

Wilson suffers a paralyzing stroke during tour→ recovers a few months later, continues to refuse to compromise

Treaty of Versailles ultimately not ratified in the U.S.A → League of Nations w/o U.S joining it

“War to end wars” sows the seeds of WW2

Germany sees itself as unjustly treated b/c it did not start the war→ resentment would eventually lead to Adolf Hitler bringing Germany back to power & taking ex-German lands→ WW2

World War II

Rise of Totalitarianism in Europe

Failures of WWI peace settlement: Germany humiliated, forced to pay reparations, admit war guilt, stripped of some land, & disarmed→ stage set for Hitler’s rise to power

Totalitarianism is a system of gov’t where all social, political, economic, intellectual, cultural, & spiritual activities are subordinated to the purposes of the rulers of a state (normally a single party led by a ruling dictator) → All aspects of society under control of gov’t

20th Century technology: information, transportation, etc. Enable Totalitarian control of all aspects of society

Fascism→ nationalistic form of dictatorship that stresses supremacy of a nation (and/or race) → individual & all institutions are subject to the service of an all-powerful state & its nation’s “destiny”

Communism→ extreme form of Socialism (economic system based on government ownership of major sources of wealth to eliminate widespread inequalities resulting from capitalism) → Communism requires a dictatorship by the Communist Party to lead the socialist society to a more perfect world in the future

Rise of Communism in Soviet Union (USSR/Russia)

Josef Stalin succeeded Lenin as Soviet dictator (Communist Party boss from 1924-1953)

Communism is fundamentally a post-industrialist system→ Russia had not industrialized when Communist party takes over→ Communist party looks to create “public industrialization”

State-owned farms→ resistance by peasants due to low wages (so gov’t can profit & reinvest→ industrialize)→ mass exterminations (10-15 million casualties)

Rise of Fascism in Italy

Benito Mussolini was asked to form a gov’t in 1922 after his party wins 35 seats in Italian parliament→ exploits fear of communism; Fascists promise to defend private property & restore Italy’s greatness→ Once in power, uses martial law to undermine democracy & create dictatorship

Nazism in Germany (variant of Facism)

Adolf Hitler & Nazi party→ writes autobiography Mein Kampf that describes his life & belief that Aryans are the “master race” & blames Jews for many of world’s problems

Hitler rises to power in Weimar Republic by promising to restore Germany’s prosperity (after Depression hits) and power & honor (Germany humiliated in WWI)

1932 elections: Nazis win plurality in Reichstag (German parliament)

1933: Hitler appointed Chancellor (Prime Minister) → intimidates Reichstag into granting him dictatorial powers in 1934

Japan’s Militant Expansion

Japan rises to power because it was the only industrialized Asian nation at the time→ needed to expand for markets & resources (especially oil)

1931: Japan invades Manchuria (in northern China)

1937: Japan launches full-scale invasion of China

Resisted by Nationalist Chinese forces led by Chiang Kai-shek

U.S under FDR offers aid to China

Aggression in Europe

Hitler rearms Germany (1933) → occupies Rhineland (demilitarized zone between Germany & France)

1936: Hitler & Mussolini form alliance (the Axis)

U.S. Response to Aggression

Isolationism renewed

Reaction to WWI made Americans averse to intervening in Europe

Neutrality Acts passed by Congress

1935: Outlawed arms sale to nations at war

1937: Cash & Carry → requires cash payments for any non-military purchases (no loans) & forbade Americans from traveling on ships of nations at war

Outbreak of WW2 in Europe

Germany moves toward war

1938: Germany takes over Austria & annexes it as part of Germany

Hitler also moves troops to borders of Czechoslovakia in preparation for seizure of part of Czechoslovakia known as Sudetenland

Britain & France respond→ pledge to defend Czechoslovakia→ war seems near→ Hitler invites British & French PMs to meet w/ him at Munich→ Munich Conference (Sept. 1938)

Hitler promises Sudetenland will be his final territorial demand→ Britain & France accept Hitler’s promise, allow him to take over Sudetenland→ Appeasement

March 1939: Hitler breaks promise made at Munich Conference→ sends troops to take over remainder of Czechoslovakia

Hitler plans to invade Poland, which had a sizeable German population

Forms Nonaggression Pact w/ Stalin→ agree not to attack each other & (secretly) agree to divide Poland between them once the war starts

September 1, 1939: Germany invades Poland→ Britain & France declare war→ WW2 formally begins

U.S. In WW2 (1939-1945)

U.S gradually abandons neutrality as war escalates

1939: Cash & Carry extended to arms sales→ Britain permitted to buy war supplies from U.S

Lend-Lease Act further abandons neutrality (March 1941) → allows U.S to “lend or lease” arms for credit

Germany breaks nonaggression pact w/ Soviet Union because Hitler was unable to invade & defeat Britain→ turns to East to invade Russia in July 1941

Conflict w/ Japan leads to formal war

Japan advances imperial ambitions in Asia→ U.S responds through economic boycott (stops selling oil to Japan)

Pearl Harbor (December 7, 1941) brings U.S into war

Germany surrenders in July 1945 after Russian advance into Germany from the east + American & British invasion after D-Day invasion from the west

Surrender of Japan after dropping of atomic bombs in 1945 → occupation of Japan after surrender→ General Douglas MacArthur helps restructure Japan into a parliamentary democracy (& ally of the U.S.A)

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Cold War (1945-1991)

Conflicting Allied goals at the end of WW2

Yalta Conference (Feb. 1945): FDR, Churchill, & Stalin meet near end of war

Agree to form United Nations

U.S wants free, democratic Europe open to trade; FDR also wants Russia’s help in rest of war vs Japan

Stalin wants to dominate Poland & Eastern Europe — U.S. & Britain want independent nations → Soviet “sphere of influence” recognized in Eastern Europe, Stalin agrees to allow “free elections” in those countries