6.1 - Economy 1877-1900.pdf - The Late 19th Century U.S...

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The Late 19 th Century U.S. Economy ( Use with America’s History , Chapters 16 and 18 ) 1877-1900
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The Rise of the Industrial Corporation Chapter 16
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1877: A Snapshot The U.S. is poised to become a mature industrial society , the second after Great Britain. This will require: New concentrations of capital , to invest in expanded factory plant New manufacturing technologies to exploit economies of scale New sources of semi-skilled factory labor The U.S. is about to receive its second great influx of foreign immigration , this time from Southern and Eastern Europe The U.S. is about to experience its second great pulsation of urbanization in the Northeast, Ohio Valley, and Great Lakes The U.S. is about to experience accelerated income inequality (The U.S. will not become a “world power” for 40 more years)
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The Late 19 th Century American Economy The former Confederacy becomes a peripheral , poor economic dependency within the Union as the world price for cotton falls Manufacturing enterprises exploit economies of scale to defend their profits during a world-wide commodity price deflation Railroads create a single, national integrated mass market for manufactured goods, while vastly expanding the U.S. steel industry More Americans are drawn into capitalist relations of production, distribution, and consumption as urbanization accelerates Artisans and craftsmen are deskilled as production processes are mechanized and the division of labor creates more semi-skilled jobs The “great merger wave” of 1895-1900 creates a popular fear of monopoly (what actually emerges by 1900-1905 is oligopoly )
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The Great Commodity Price Deflation Between 1880-1892, wholesale prices for agricultural commodities and manufactured goods declined 30% Many small farms went into foreclosure ; many smaller factories and workshops went into bankruptcy Producers could stay in business if they reduced their costs of production faster than the market price for their product fell Generally, that was only possible through mechanization , in both agriculture and manufacturing. However, New mechanical technology was expensive, requiring producers to go into debt , which could only be paid back By expanding plant and producing more to achieve economies of scale bigger factories and farms lead to cheaper products
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