Economic Change in America Essay Example For Students

Economic Change in America Essay The Economic Change in AmericaThe United States of America is a country that has gone through many changes in its economical system even though we are still considered one of the youngest countries in the world. The United States is also considered one of the wealthiest countries in the world as well. This country however did not start out this way there were hard times. Hard times that helped shape this nation and its people. Yet along with the hard times there were good times as well. Yet through these times our economic system has changed, to evolve with the country. The events that changed our economic system was the Souths dependence on cotton, the Civil War and reformation, and then The Great Depression. With the end of the War of 1812, few people in the United States envisioned a civil war in the future. With a developing Western section of the country, the future looked bright for a stable growing economy based on extraction of resources (agriculture, timber, and various reso urces in the ground). With the shipping resources of New England and financial centers in the North, agriculture and extraction of resources seemed to be the foundation to base the countrys economy. Within a short period of time, the North was beginning to industrialize, while the Southern states stayed Agrarian. The South did not industrialize, because cotton provided an economic system for the whole country that was as rewarding to the Southern farmers as to the Northern industrialists. Cotton had a huge impact not only in the United States, but the rest of the world as well. Factors that contributed to the economic system that this attitude was a part of were: the sale of government land in the South, foreign and domestic demand for cotton, and the contrast between free and slave labor. These were some of the factors that made cotton king. Cotton was king, with the expansion into the west and the huge labor source that was available at that time. Slave labor was such a big factor that Mississippi did not outlaw slavery until two years ago. Also with the transportation evolution during this era, the demand for cotton grew even more, since the textiles were being exported just as fast. From all of this one must realize the importance that cotton had in the world. After the War of 1812, the U.S. government sold large amounts of land in the Southern territories of Alabama and Mississippi. Sales of government land in the two territories went from 27,000 acres in 1815 to almost 3 million acres in 1819.Many of the purchasers of the land were farmers from South Carolina and Georgia. These farmers looked forward to planting on previously uncultivated land. The land could take heavy cultivation before the output suffered. As an example, three acres of land could be bought for the same cost of the lime used to restore productivity on one acre of land in South Carolina.The crop the farmers planted on this land was cotton. The reason they planted cotton was that the price of cotton per pound surged from 14 cents before the War of 1812 to 21 cents in 1815 and to 29.5 cents in 1816.The high price was due to a heavy demand for raw cotton in Great Britain. In the 1830s and 1840s, over 80 percent of all cotton produced was exported. Of this, around 85 percen t of all exported cotton went to Great Britain.Once the new lands had been prepared for and planted with cotton, the supply of raw cotton increased to help bring the price of cotton down to 12 cents a pound by 1824. This added to the demand for cotton which was already high. The South in the most part rejoiced from this economic high and with this came political power to keep their labor force. Even though the price of cotton was high in the early years, the cotton grower had challenges to making money. Between goods bought from the outside for the farmers family and slave labor, the farmer managed a subsistence living. The steamboat provided a way for the farmer to make a living. Prior to the steamboat, goods purchased had to come over the Appalachians at a large premium. The steamboat helped solve this problem by reducing the freight rates going to and from New Orleans.The money saved on goods provided a margin that could be used for investment. The investment made by the farmers was in more and more productive land.The productivity of the land in pounds per acre in 1850 as follows: Tennessee, 300; South Carolina, 320; Georgia, 500; Alabama, 525; Mississippi, 650; Texas, 750. From the income received by the cotton South residents reached levels greater than the average person in the North. As can be seen, the free population in the West South Central states had a per-capita income far above the other regions in the country. This contrasts with the older regions of the South that had incomes below the nations average. But looking at only free population, the Cotton South per-capita income was much greater than the Northeast. The surplus income mostly came from the slave labor used in the cotton economy. The slave population in the south during this time also grew at an extremely rapid rate. This only added to the high production in the South. The slowness to industrialize on the part of the South was a reaction to the profitability of cotton. If cotton had not gotten a hold on the South as its economic base in the early years, industry may have had a better chance of growing. But the land sales and presence of the steamboat allowed the cotton grower the chance to make money. By using slave labor to grow and harvest the cotton, the slave owners attained a standard of living much greater than the average American. Many of the few Southern industrialists that built factories used slaves in the factories but found that it was not as profitable as what they thought. With the demand of English and American textile makers, cotton became the engine that drove the American economy forward every respect from the steamboat company that transported the cotton to the companies that sold the final product. In the first section of this paper we discussed the mire importance that cotton played in the economy of the South and how cotton was king. In this section things will be a bit different due to the fact that the South is involved with a war and the North has set up a blockade. Than we will see how the economy has changed after the war with the demise of the huge plantation system to the sharecropping system of small farms. After the war even the laws of the South changed, with the involvement of the Jim Crow laws. All of these things combine to change the face of the South as an economic system and in general. The Civil war, and then the Reconstruction made a new South that was never to be the same. During this time period the South was involved with what some may consider hell, and a winless war. This war was terrible due to the fact that they were outnumbered more than three to one. However this is not the way the South saw it, they felt that God, and the Southern cause could defeat any enemy and they almost did. Simply because of the Southern generals like Stonewall Jackson, and Robert E. Lee. Whose tactics are still studied today in almost all-military institutions. Yet even with such superior leaders the South had many problems, problems that added up to destroy the South as they knew it. The South also had almost no significant transportation system other than the Mississippi River and after that was taken the South was then divided it. This also hindered their trade of cotton, which was their primary source of money at the time. Then with the Naval Blockade becoming effective there was even less trade going on at this time. Another major factor in this as well was the condition and the lack of railroad at this time. Compared to the North the Souths Rail system was extremely outmatched. And after the North would tare it up the South would be for the most part unable to lay any back down for the lack of steel. And just the amount compared to the North far out ways the South. This was a huge factor in the war, because the South took longer to transport men and goods slower than the North. All of this led to almost no trade of cotton, which was their primary source of income. Interesting enough however, is the fact that the South wanted to hinder trade with England in t he hope that they would enter the war. This however did not occur and the South had its problems mount. Darwin Awards EssayThe fact that the Great Depression began in 1929, then, on the Republicans watch, is a great embarrassment to conservative economists. Many try to blame the worsening of the Depression on Hoover, for supposedly betraying the laissez-faire ideology. Hoovers government action occurred during his last year in office, long after the worst of the Depression had hit. In fact, he was voted out of office for doing too little too late. The only notable exception to his earlier idleness was the Smoot-Hawley tariff of 1930. Which was a tariff that was especially hard on agricultural products. Many economists of the day did not believe in this tariff due to the fact that they feared that the countries importing their products would also raise there tariffs on the U.S. as retaliation. In all actuality it really had little effect on the countries foreign affairsBut much more importantly, the economy was clearly turning downward even before Hoover took office in 1929. Entire se ctors of the economy were depressed throughout the decade, like agriculture, energy and mining. Even the two industries with the most spectacular growth construction and automobile manufacturing were contracting in the year before the stock market crash of 1929. Which shows the economy was already suffering from a recession. Adding to the problems of an unbalanced wealth and the over production of goods one then must look at the banks. The first banking panic occurred in late 1930; the second in the spring of 1931, and the third in March 1933. When it was over, 10,000 banks had gone out of business, with well over $2 billion in deposits lost. Banking panics occur when the public fears that monetary institutions are on the verge of collapse. The securities market falls so fast that investors scramble to convert their holdings into cash, thus creating a public run on banks. But banks, whose loans are based on fractional reserves, cannot afford to give everyone their money all at once, and therefore go bankrupt. A chain reaction follows as deposit owners who have lost their money can no longer afford to pay off other debts and costs of business, driving others to scramble for cash as well. Roosevelt would go on to create the Federal Deposit Insurance Commission to protect the American economy from bank runs in the future. Although the 1987 crash on Wall Street was the largest in American history, these safeguards worked admirably to prevent a bank panic from depressing the economy. When one discuses the Great Depression, one must mention Franklin Delano Roosevelt since had an more of an impact on the people, then the economy. He had an effect on the people of the times by giving them hope and at this time in our history as Americans, hope was a lot. He also eased their pain by trying to solve the economic problems of the time. Franklin Delano Roosevelt was the 32nd President of the US.He was born in Hyde Park, N.Y. Admitted to the New York bar in 1907, he served as a progressive state senator and assistant navy secretary. After a crippling attack of polio in 1921, he resumed his political career, becoming governor of New York. With the country in a deep depression, he easily defeated Herbert Hoover in the Presidential election of 1932. Roosevelt came to office in the hope that he would have a solution to the economic calamity of the nation. His answer was the New Deal, a recovery program to provide immediate relief and reforms. While the nations economy did not fully revive until wartime, his actions earned Roosevelt the gratitude of working people that outweighed the hatred of conservatives. Reelected by a landslide in 1936, he won unprecedented third and fourth terms in 1940 and 1944. And is regarded as one of the best presidents of all time. After Roosevelt became president in his first term he and the Brain Trust came up with an idea, an idea called The New Deala far reaching program, for the forgotten man. Which took action to bring immediate relief as well as reforms for business as well as agriculture. The new administrations first objective was to alleviate the suffering of the unemployed. Within the first hundred days after the inauguration dozens of agencies were set up to dispense emergency and short term governmental aid and to provide temporary jobs, construction projects, and youth work in national forests. Some of the projects were The Federal Emergency Relief Agency, that was directed by Harry Hopkins that pumped a half a billion into bankrupt states and other areas. The most effective of all was the Tennessee River Authority which was done to provide essential flood control, hydroelectric power, and economic reconstruction for a seven state area. Many of these planes were thought to undermine Americans as w orkers, one should not take that into full consideration since people must survive and would do anything to survive. Roosevelt and the Brain trust also took another step to provide wider safeguards. The Social Security Act provided for nation wide systems for the elderly and unemployment. Maximum hours and a minimum wages were also set in certain industries in 1938. Some New Deal laws were declared unconstitutional by the U.S. Supreme Court, but by 1937 Roosevelt made enough new appointments to achieve a court majority favoring most of his measures. Despite resistance from the business community most of the New Deal reforms became a part of the U.S.A. For the last 60 years the social safety of the New Deal has cushioned the severity of the cyclical business downturns and prevented so far a repetition of a full scale depression. These Acts that were passed were needed and are still extremely relevant in todays society. Although, at first, Roosevelt kept the U.S.A. out of the second World War, he supported Great Britain through the lend-lease act with much needed war material. After the Japanese attack on Pearl Harbor he allied the U.S.A. with Great Britain and the USSR to defeat Germany and Japan in World War II. Now with the U.S. involved with the largest war of all times, and Roosevelt leading our country through an extremely tough time died less than four weeks before the German surrender. Soon after that the Manhattan project took full form with the dropping of little boy and fat man, then with the surrender of Japan and the end of the war. This war just through its brief summary was what in all actuality is what ended The Great Depression in its entirety. With the majority of factories being converted into a war machine. The war also gave out as many jobs that were wanted and then some extra, even women were working on the factory lines as well. The machines that were being produced was not on ly for the American troops, but also for sale to the other countries involved with the allied forces. This all added to a giant boom in our economy, that would last for decades. One thing that happened from The Great Depression was that our country now knows how to avert a banking panic. It also taught us about the value of a middle class which aids in the distribution of wealth. The distribution of wealth is probably the most important factor so that our economy is not unbalanced and there are people out there to buy the products that our economy produces. However though the most important thing in my opinion is how our country was able to deal with the Depression. The strategy that the President and high ranking officials had taken to create immediate action which would end the Depression and then by how far our country has come together. An example of this is monopoly which was created during this time and in all actuality gave hope to the people who played during this hard time. And as I had mentioned earlier, hope was and is a great thing during hard times. BibliographyBruchey, Stuart. The Wealth of the Nation: An Economic History of the United States (New York: W.W. Norton, 1984). Handlin, Oscar and Mary Handlin, The Wealth of the American People (New York: McGraw-Hill, 1975). Lebergott, Stanley. The Americans: An Economic Record (New York: W.W. Norton, 1984). Levine, Bruce and others. Who Built America?: Working People and the Nations Economy, Politics Culture, and Society (New York: Pantheon Books, 1989). Poulson, Barry W. Economic History of the United States (New York: Macmillian Publishing, 1981). Walton, Gary M. and Ross M. Robertson, History of the American Economy, 5th ed. (New York: Harcourt Brace Jovanovich, 1983.