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by: Dean Wu

hist121 HIST 121

Dean Wu
HIST 121
Steven Leiken

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HIST 121
Steven Leiken
Class Notes
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This 38 page Class Notes was uploaded by Dean Wu on Thursday April 30, 2015. The Class Notes belongs to HIST 121 at San Francisco State University taught by Steven Leiken in Spring 2015. Since its upload, it has received 24 views. For similar materials see HIST 121 in History at San Francisco State University.


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Date Created: 04/30/15
HISTORY 130 I The European Background of American History 1400 1600 1 Europe in 1400 Decline of the classical world of the Roman empire ff 500 AD The Middle Ages c 500 1500 Classical learning lost Feudal society local and agricultural warlords dominate Europe in 1400 late Middle Ages Backward compared to civilizations of Middle East India and China Ming 1368 164 Problem How did Europe achieve a global extention of power by 1600 2 The Awakening of Europe The Renaissance 1 Rediscovery of classical learning 2 Development of national states Power of local feudal warlords replaced by national states ruled by kings By 1500 Portugal Spain France and England had national states with centralized control over taxation law making administration of justice control of military Importance of nationalism in modern world Importance of national states in Colonial empire building 3 Economic developments Medieval feudalism local and agricultural was giving way Growth of trade and commerce especially long distance trade Growth of towns and cities Development of merchant class with new set of values Development of a monetary economy replacing the medieval Banking in Italy by 1400 Joint stock trading companies Importance of luxury goods from the East 4 Development of Science and Technology Printing Johannes Gutenberg 1456 Created a quotMedia Revolutionquot more books varied subject matter more accurate text Encouraged expansion of literacy Gunpowder ff 1300 Created new system of military weapons Navigation technology New type of ships more accurate maps and charts new navigation instruments compass astrolabe quadrant 5 Religious reformation Martin Luther 1517 Division of Christianity into Catholic and Protestants and barter economy conflict 3 The Discovery of quotThe New Worl quot North and South America 1 Importance of trade in luxury goods from the East 2 Italian monopoly on trade routes in eastern Mediterranean 3 Search for new routes to Asia Portuguese around Africa reached India in 1498 Spain Voyage of Christopher Colombus 1492 Discovery of new lands Named quotAmericaquot from Americus Vespuccius c 1507 2 II New World Empires 1 The Spanish Colonial Empire the first European empire in the New World 1 The conquest of Mexico 1519 1521 Hernando Cortez 14851547 with about 600 Spanish soldiers and some Indian allies conquered Aztec empire Importance of gun powder weapons Aztec empire Large empire in central Mexico ruled by Aztec tribe An advanced civilization Tenochtitlan the capital a large and prosperous city 2 The conquest of western South America 1532 38 Francisco Pizarro 14704541 with a small force of about 200 soldiers conquered the Inca empire 3 Exploitation of New World resources Gold and silver 1500 1650 an estimated 200 tons of gold and 16000 tons of silver shipped back to Spain Land and labor The encomienda system and its results exploitation of Indian labor development of large landed estates owned by ruling class concentration on large scale production of specialized crops 4 Impact on the Native Peoples Origins of the native peoples Beringian migration theory prehistoric migrations from Siberian Asia by way of land bridge to Alaska Impact of European diseasesespecially smallpox Estimated death rate in Mexico 15201600 as high as 90 of population Estimated pOpuiation of Mexico 1520 25 million in 1600 less than 5 million 5 Beginning of African slavery in the New World 2 The French Colonial Empire Canada and Mississippi valley Voyages of Jacques Cartier 15345 La Salle39s exploration of the Mississippi river Few French settlers Estimated 75000 by 1750 Conquest of New France by the English in 1763 3 The English Colonial Empire Discussed as a separate topic following 3 III Development of the English Colonies 1600 1775 1 General Points 1 Compared to other Europeans the English colonies began late First permanent English colony in North AmericaJamestown in Virginia 1607 2 Began as separate individual settlements Virginia 1607 Massachusetts 16201630 Maryland 1634 Connecticut and Rhode Island 1636 the Carolinas 1663 New York 1663 Dutch 1623 Pennsylvania 1681 Georgia 1732 2 Political Development 1 Methods of beginning English colonies Jointstock trading settlements Example VA Settlements by religious groups Example MA by Puritans Proprietary colonies Example PA William Penn and Quakers MD Calvert family and Catholics GA James Oglethorpe and convicts Independent or quot0verflowquot colonies Examples CT and RI Royal colonies By 1775 all colonies except MD and PA were royal colonies 2 Structure of government in the English colonies Division according to function Executive Legislative Judicial Executive Governor Appointed by king or proprietor Legislature bicameral two houses Upper House Council appointed Lower House elected by qualified voters House of Burgesses in Virginia was the first popularly elected legislative assembly in America 1619 3 Voting qualifications Adult 21 years white male Property qualifications in most colonies Religious qualifications in some colonies Significance of popular voting gave colonists direct voice in their own affairs created tradition of popular participation in government created experienced group of political leaders made transition to independence much easier 3 Economic development of the English colonies In all English colonies throughout the colonial period most persons were engaged in subsistence agriculture Subsistenceweconomic activity devoted to basic needs such as food clothing and shelter 1 Southern colonies Subsistence agriculturemajority of population Plantation agriculture Production of commercial crops tobacco in VA MD and NC rice in SC and GA Access to market systemwater transportation Larger scale of operations Large cheap labor force MInclentured servants Voluntary migration of Europeans limited term of service 5 to 7 years African slavery First record of introduction of Africans in English coloniesVA in 1619 Slavery was an established institution in VA by 1650 Other southern crops Naval supplies tar rope timber Indigo plant producing blue dye 2 New England colonies Subsistence farmers majority of population Domestic manufacturing making goods in households such as leather shoes soap candles etc In uence of Puritan emphasis on quotuseful workquot and of weather 14 Maritime occupations fishing shipping ship building Mercantile occupations ranging from large import export merchants to small shop keepers to itinerant peddlers 3 Middle colonies NY and PA Subsistence farmers majority of pepulation Commercial farming especially the production of foodstuffs such as wheat corn rye beef pork cheese Manufactures food processing metals especially production of crude iron Mercantile occupations1arge merchants small shop keepers itinerant peddlers 4 Growth of colonial trade Value of colonial exports 1700 400000 1775 51900000 Trade patternsthe American colonies traded with Europe with Africa mostly slaves and with the islands of the Caribbean British trade policy Mercantilism Economic philosophy of Mercantilism Coloniessource of raw materials Mother country manufactured goods Colonies customers Example Hat Act 1732 and Iron Act 1750 Navigation Actsecolonial trade restricted to Britain and the British empire 4 Social Development of the English Colonies 1 General characteristics of the colonial population c 1775 Varied Product of immigration from Europe Africa 8 Asia European English Scots ScotchIrish German 250000 10 pop Other Europeans African600000 20 pop AsianPrehistoric migration of Indian ancestors Historic migrationafollowing 1850 Growing Estimated Colonial Population 165050300 1700 250000 USO 1170000 1775 2250000 17903930000 1800 5308000 Sources of growth Immigration Natural increasebirthrate in the American colonies was about twice that of Europe in 1750 Youthful In 1790 half the population was age 15 or younger Present trend an aging population 1900 4 of pop age 65 or more 199012 quot Rural More than 90 of the pOpulation in 1790 lived in the countryside Only 7 lived in towns or cities of 2500 or more persons 2 Social Classes A Social Pyramid Percentage of Population Percentage of Wealth Owned JV l K Upper 10 50 of wealth 410 farmers Middle 50 1096 artisans amp tradesmen 50 wealth quot 20 nonpropertied whites Lower 40 20 slaves 5 IV The American Revolution 1763 1783 1 The Crisis of Empire 17631775 1 The Seven Years War 17561763 and Its Results A war between Britain and France of worldwide scope in which Britain was victorious Results France lost her colonial empire in North America This removed a threat to colonial security and meant that the American colonies felt less dependent on GB for their protection Created a new quotpsychologicalquot relation between GB and the colonies Created a new economic relation between GB and the colonies Change of British policy from quotsalutary neglectquot to greater regulation and taxation of the colonies in order a to pay the costs of the 7 Years War and b to pay the costs of governing and protecting the colonies 2 The Taxation Controversy 1 The Stamp Act 1765 The first direct tax by GB on American colonists Resulted in Riots in Boston in August 1765 and later in New York and other cities Meeting of the Stamp Act Congress in New York City in October of 1765 The first intercolonial meeting to protest British policy The colonials claimed a quotRights of Englishmenquot and b quotNo Taxation Without Representationquot Repeal of the Stamp Act In 1766 moved by strength of colonial opposition Parliament repealed the Stamp Act But GB still needed revenue 2 Townshend Acts 1767 Indirect taxes on various commodities Colonial opposition Organization of an effective boycott of British goods British exports to colonies declined from 2000000 in 1768 to 1200000 in 1770 Revenue from taxation declined from 13000 in 1768 to 2727 in 1770 British reaction Colonial opposition and protests from British merchants were effective Parliament repealed Townshend Acts in 1770 but retained a tax on tea as a symbol that GB did have authority to regulate the American colonies NB Note the importance of leadership of merchants especially the merchants of Boston in promoting American opposition 3 Period from 1770 to 1773 was relatively calm The only tax the Americans were paying to the British government was a symbolic tax on tea 4 Tea Act In May 1773 Parliament passed an Act which exempted the powerful East India Company from paying the tax on tea But colonial merchants still had to pay the tax This led to the famous Boston Tea Party on 16 December 1773 when 340 chests of tax exempt tea valued at 10000 was thrown into Boston harbor 5 Coercive Acts March 1774 Called Intolerable Acts by colonials 39 Angered by the action in Boston Parliament passed a series of punitive acts Boston Port Act closed port of Boston until tea was paid for Massachusetts Government Act moved colonial government to Salem away from influence of Boston mobs Justice Act British officials accused of crime might be tried in GB away from hostile colonial juries Quartering Act required colonials to provide room and food for British soldiers Most hated of all the acts 6 First Continental Congress Delegates from American colonies met in Philadelphia PA SeptemberOctober 1774 to consider a united response Denounced the CoerciveIntolerable Acts Published a quotDeclaration of Rights and Grievancesquot Adapted another boycott Agreed to meet again in the spring of 1775 5 3 The Revolutionary War No attempt is made in this topic to consider the military history of the American Revolution A few points are noted here 1 Battles of Lexington and Concord The opening shots of the Revolution were fired in encounters between British soldiers and colonial militia men in the early morning hours of 19 April 1775 2 Second Continental Congress By the time the Second Continental Congress met at Philadelphia in May 1775 fighting was already widespread in the area around Boston The Congress created a continental army and appointed George Washington as its commander The Second Continental Congress remained in session throughout the war as a provisional revolutionary government the nearest thing to a national government during the war and exercised a variety of functions 3 The Declaration of Independence Adopted on 4 July 1776 The war had been going on for over a year Clearly independence was not the original goal of the revolution 14 End of the Revolution The final battle of the war was fought at Yorktown in VA in October 1781 In the Treaty of Paris 1783 the British government recognized the independence of the United States of America 4 Britain39s Problems in Fighting the Revolution Problem WhyHow did the American colonies weak and divided manage to win independence against GB the world39s strongest power at the time 1 Logistics problems of fighting a war at a great distance 2 Tactics problems of fighting a war over a large area with a scattered rural population and of dealing with guerrilla warfare 3 Expense 4 Maintaining the political will to continue 5 Necessity to keep major force on guard in Europe 6 Underestimated Americans39 determination and ability 7 Overestimated influence of Loyalists 5 General Points concerning the Revolution 1 Relatively long war 1775 1781 6 years 2 Divided allegiance of Americans US patriot 13 loyalists 13 not care 3 Aid from France was crucial to the American cause Treaties of Alliance and Friendship February 1778 French military and financial aid 4 Compared to other major modern revolutions the American revolution was not followed by purges of so called quotenemies of the revolutionquot by violent factional power struggles or by counter revolutionary coop attempts 5 Compared to other major modern revolutions the American revolution did not aim at a quotrevolutionaryquot transformation of society There were no attacks on the existing religious institutions no programs of massive social leveling to attempts at economic re structuring The principal change was poltical from British to American 6 A quotConservative Revolutionquot From one perspective the American revolution was inspired more by the enjoyment of freedom than by the burdens of intolerable oppression It was a revolution to quotconservequot freedom already in existence 7 A quotLiberal Revolutionquot From another perspective the American revolution was inspired by quotliberalquot ideals that were then and still are truly revolutionary These may be seen in the Declaration of Independence and the in uence of John Locke39s quotEssays of Civil Governmentquot 1690 All men are created equal All men have basic human rights Government is based on the consent of the people not on Divine Right and subject to change at the will of the people 7 V The Confederation and the Constitution 1780 1790 1 The Articles of Confederation The first national government of the United States Produced by the Second Continental Congress Adopted in 1781 Replaced by the present Constitution in 1789 2 Weakness of the Articles 1 National government had too little power No executive branch No judicial branch Unicameral legislature with inadequate powers Each state had equal representation No power to tax or to regulate commerce Inadequate control over money Most measures required 23 vote to pass No power to enforce decisions 2 States had too much power Each state was sovereign and independent Members of Congress were appointed and controlled by states 3 Unanimous consent of states required to amend Articles 3 National Crisis 1 Trade and tariff restrictions among states led to commercial chaos 2 Lack of uniform national money led to financial chaos 3 Declining values of Continental money led to in ation Value of Continental to 100 Specie Jan 1777 125 Jan 1780 4250 Jan 1778 400 Jan 1781 16700 Jan 1779 800 4 Growing domestic disorder The most serious episode of popular disorder was Shays39 Rebellion sunnmer 1786 to winter 1787 5 Weakness in managing foreign affairs 4 Movement of Form a New Government The movement to form a stronger national government was led by men of property and nationalistic vision There was little demand for a stronger national government among the masses of ordinary people 5 The Constitutional Convention Met at Philadelphia 25 May to 17 September 1787 Led by men of the commercial and landed classes Although marked by disagreements and compromise produced the present Constitution of the United States VI Essentials of the Constitution 1 The Legislative Branch The representational controversyquot a difference of interests between the big states and the small states led to the formation of a bicameral Congress 1 Senate the upper house of Congress Representation equal Two senators from each state Qualifications 30 years of age 9 years a citizen an inhabitant of the state represented Manner of election Before 1913 elected by state legislatures Since 1913 17th Amdt elected by qualified voters in each state Term 6 years amp re election permitted 2 House of Representativesthe lower house of Congress Representation Based on population quotPopulationquot defined as the whole number of free persons excluding Indians not taxed and three fifths of all other persons Known as the quotThreefifths Compromisequot Evidence of disagreements over slavery Qualifications 25 years of age 7 years a citizen lnhabitant of the state represented Manner of election Elected by qualified voters by districts Term 2 years amp reelection permitted Qualified Voter Any person qualified to vote for the lower house of the legislature of the state in which he resides is qualified to vote for national officers 3 Powers of Congress Section 8 A Major powers To levy taxes To regulate interstatequot and foreign commerce Interstate between two or more state Intrastate within a state To control money to coin money amp regulate its value to punish counterfeiting to borrow money to regulate bankruptcy To declare war cf Art II on powers of President To create federal courts below the Supreme Court B Other powers over the Armed Forces Post Office Weights and Measures Patents and Copyrights Immigration and Naturalization C Consent of the Senate To approve or disapprove of Treaties 23 vote required of Appointments made by President 4 The Law Making Process Bill introduced Passed by majority in each house Sent to President Sign dew Veto if passed by 23 vote in each house becomes law 5 Limitations on Powers of Congress No tax on exports quotex post factoquot law title of nobility preference of one state over another 6 Limitations on Powers of States No treaties tariffs title of nobility impairment of contract issue of money 9 2 The Executive Branch Article 11 created a new office President of the United State The Chief Executive of the nation 1 Qualifications 35 years of age Natural born citizen 2 Term 4 years Limit of two terms by 22nd Amdt 1951 3 Manner of election The Electoral System Voters in each state elect Electors Electors elect the President majority required Method of finding the number of Electors from any state Let E the number of Electors from any state Let R the number of members of HR from any state Let S the number of Senators from any state ThenERS or ER2 Example California has 52 members of HR Therefore California has 54 electoral votes 3 Powers and Duties of the President Commander in Chief of the Armed Forces The War Powers Act 1973 limits presidential commitment of US forces to hostile action to 90 days without specific authorization of Congress Recommend legislation Veto power But 23 vote of both houses over rides veto Appointments Most appointments require consent of Senate Grant pardons Conduct foreign affairs Treaties require 23 vote of Senate Faithfully to execute the law 5 Removal of the President from Office A The Impeachment Process Accusation Impeachment by HR Trial by Senate 23 vote to find guilty B Penalty Removal from office Disqualification from future office 3 The Judicial Branch Article III deals with the national or federal courts 1 Supreme Court Established by the Constitution 2 Lesser Courts Established by Congress Circuit Courts of Appeal District Courts 3 Judges of the Federal Courts Appointed by the President with consent of the Senate Term of quotgood behaviorquot Removal by impeachment proceedings 4 Treason Defined as levying war against the US or giving quotaid and comfortquot to the enemy Must be supported by the testimony of two witnesses or confession in open court 5 Jurisdiction of the Federal Courts A According to the nature of the question Any case involving a question of the Constitution laws of the US treaties or maritime law B According to the parties involved a Government of US is a party b Two or more states c State and citizen of another state d Foreign govt or citizen e Ambassadors 10 6 Procedure of Cases in Federal Courts Most federal cases begin in the District Courts may be appealed to a Circuit Court of Appeals and finally to the Supreme Court 4 Other Articles 1 Article IV contains clauses relating to a the procedure of admission of new states b the guarantee of a quotrepublicanquot form of government and c quotfull faith and creditquot among the states 2 Article V outlines the procedure for amending the Constitution Although two procedures are mentioned only on has been used Amendment Proposed by 23 vote in each house of Congress Amendment Ratified by 34 of the state legislatures 3 Article VI declares that the Constitution and laws of the national government are the quotsupreme law of the land 4 Article VII provides that the Constitution shall come into effect when ratified by 9 of the 13 states in specially elected Conventions 5 Amendments of the Constitution Twenty six Amendments have been adopted Among the most important are 1 The Bill of Rights The first ten amendments protect the rights of individual persons such as freedom of speech of religion of the press of trial by jury They were added as a group in 1791 2 Amendments 13 14 and 15 deal with the abolition of slavery 3 Amendment 17 1913 provides for the pepular election of US Senators Amendment 14 1920 guarantees the right to vote to women s Constitutional Principles 1 Federal principle Power divided between national and state governments 2 Separation of powers Checks and Balances 3 Limited government and Popular Sovereignty 4 A quotrepublicanquot form of government 1 VII The Federalist Era 1790 1800 1 The Administration of George Washington 1789 1797 1 Organizing the new government Creation of the President s Cabinet Secretary of State Thomas Jefferson Secretary of Treasury Alexander Hamilton Secretary of War Attorney General 2 Hamilton39s financial program Pay foreign debt Pay domestic national debt at full face value Assume and pay debts of the states Tariff and Excise tax Establish the Bank of the United States BUS 3 Hamilton39s socialpolitical philosophy Support the interests of the investor class promote government by the rich the wellborn the well educated A governing elite 4 Results of Hamilton39s policies Different opinions about economic policies Different opinions about interpretation of the Constitution Beginning of national political parties 2 Federalist vs DemocraticRepublicans Hamilton vs Jefferson 1 Government Upper class vs Masses of the People 2 Economic Policy Commercial vs Agricultural interests quotTrickle Downquot vs quotBubble Upquot theories of economics Supply side Demand side 3 State Federal Powers Hamilton strong national government limited power of states Jefferson limited national government strong power of states 4 Interpretation of the Constitution Jefferson strict and literal interpretation Hamilton doctrine of quotImplied Powersquot 5 Foreign Policy Hamilton pro British Jeffersonpro French 3 Foreign Affairs 1789 1801 l Washington39s administration 1789 1797 Wars of the French Revolution and of Napoleon Washington39s neutrality policy Failure of neutrality Attacks on American ships cargo and men by nations at war 2 John Adams administration 17974801 XYZ Affair and undeclared naval war with France 1797 Alien and Sedition Acts 1798 Restrictions on freedom of speech and press 25 persons arrested 10 convicted 12 VIII The Jeffersonian Period 1800 1825 1 The administration of Thomas Jefferson 18011809 1 The Election of 1800 First peaceful and orderly transfer of power Electoral confusion and decision by HR 2 Repeal of the Alien and Sedition Acts 3 Westward Expansion The Louisiana Purchase 1803 Purchase from France of the western Mississippi watershed for 15000000 in gold Importance for national unity economic development and future growth New land laws to encourage settlement by individual farmers Minimum purchase reduced from 640 acres at 200 to 80 later 40 acres at 125 Six new states admitted 1803 1819 4 The Jeffersonian Ideal of America ma nation of small farmers 2 Foreign Affairs 1800 1815 1 Failure of Washington39s and Adams39 foreign policies 2 Failure of Jefferson s foreign policy Embargo Act 1807 08 3 Failure of Madison39s foreign policy Ied to war with Britain 4 The War of 1812 Causes a Continued seizures of American shipping and unpressment of American sailors b Influence of the quotWar Hawksquot anxious to arouse national patriotism and defend national honor Course of the war a US unprepared for war Considerable losses Raid on Washington D C 24 August 1814 b Victory at New Orleans 8 January 1815 Andrew Jackson became a national hero 0 Treaty of Ghent Signed 24 December 1814 Century of relative peace in Europe 1815 1914 Provided an opportunity to redirect national attention away from Europe toward westward expansion and internal development 13 IX Economic Development 1815 1860 I This topic is concerned with the beginning of the Industrial Revolution in America and its effects 1 Stages of Economic Development 1 Traditional society 2 Transitional stage 3 TakeOff 4 Drive to Maturity 5 Mature Industrial societyquotMass Societyquot 2 Conditions for Take Off and Industrial Maturity 1 Resource base 2 Openness to change 3 Trained work force 4 Political stability 5 Distribution network Infrastructure 3 The Transportation Revolution 1 Roadways primitive and undeve10ped 2 River system Steamboat 1807 Steamboats on western rivers after 1810 revolutionized river transportation Voyage upriver from New Orleans to Cincinnati reduced from six months to six days by 1850 3 Canal building Erie Canal constructed 181725 364 miles long 585 km Reduced time of transit from New York City to Buffalo from 20 to 6 days reduced costs from 100 to 5 per ton Linked NYC to extensive market area made NYC the nation39s major commercial city 4 Railroads Technology developed in GB but soon spread to US Provided basis of a national transportation system 183040 slow start of RR construction By 1840 3000 miles of track By 1860 30000 miles of track 5 Telegraph communications revolution Developed by Samuel F B Morse in 1838 Telegraph network expanded with the RR system Created national communications system 6 Results of transportation and communications developments Created an integrated national market Facilitated the transition from a subsistence to an entrepreneurial economy Promoted the development of a monetary economy Promoted the development of specialized regional economies 4 The Manufacturing Economy of the Northeast 1 Importance of technological developments American contributions to technological development DeveIOpment of the steamboat Standardized interchangable parts Assembly line production 2 Development of the Factory System Textile production was the first to mechanize and industrialize Began in England but soon came to US Samuel Slater built the first textile mill in US in Rhode Island in 1790 The Boston Associates factory at Waltham MA in 1813 was the first integrated textile production facility 3 Characteristics of the Factory System Factory Workers 1820 350000 1860 1930000 Extensive employment of women and children in factory labor 14 Hours Wages and Conditions of Industrial Labor Hours 1012 hours per day 6072 hours per week Wages Men 4 to 6 per week WomenChildren 1 to 4 per week Conditions Poor conditions of lighting ventilation noise reduction and lack of safetydevices New SocialEconomic Classes Industrialization created two new classes a Wage earning workers b Capitalist investor class 5 The Plantation Economy of the South 1 General points concerning the southern economy Majority of the southern pOpulation were economically at or near the subsistence level The Plantation Economy Planters were a numerical minority but the most important social political and economic class The plantation economy was characterized by Large scale production of a commercial crOp Use of slave labor 2 Development of the cotton economy Mechanization of textile production created a large demand for cotton and high prices But there was a technological problem with production Processing problem solved by Eli Whitney Invention of the quotcotton ginquot in 1790 Cultivation of cotton expanded rapidly World Output of Cotton 1800 US 10 Asia 60 1850 US 68 Asia 22 Expansion of Slavery Distribution of Slave Ownership in 1850 350000 slave owners 6 120000 non slave owners 4000000 slaves 4 Rise of the Anti Slavery Movement To be discussed in a later topic 6 The Agricultural Economy of the Northwest 1 Crops Mainly foodstuffs wheat corn beef pork etc 2 Family farming average about 200 acres 3 Importance of Technology New agricultural machinery for plowing planting cultivation harvesting and processing led to increased output per worker Expansion of the transportation network provided access to market for greater number of persons 15 X Jacksonian Democracy Politics and Economics 1825 1850 1 The Election of 1824 1 Decline of the Federalist party Rise of regional candidates among the DemocraticRepublicans No candidate received a majority of the Electoral Vote John Quincy Adams was chosen President by the House of Representatives over Andrew Jackson 2 The administration of John Quincy Adams 18254829 Adams39 programs largely frustrated by political opposition from the Jackson faction 2 The Election of 1828 The triumph of Andrew Jackson 3 Politics and Economics during the Age of Jackson 1 Internal Improvements J Q Adams favored use of federal money for transportation projects Jackson opposed largely for political reasons Result Development of the transportation system esp RR network by private capital 2 Tariff Tax on imports Types of tariff Revenue tariff Protective tariff Southern opposition to protective tariff esp ff 1828 Claimed that protective tariff forced southern consumers to pay artificially high prices benefiting northern manufacturers at the expense of southern consumers South Carolina refused to enforce the tariff in that state in 1832 Led to a major constitutional crisis Can a state defy the national government South Carolina forced to back down by Jackson39s strong stand in support of national government Lack of support from other southern states Compromise legislation lowering of tariff rates Result Increased the divisions between North and South 3 Bank of the United States BUS Review of history of BUS from Hamilton to Jackson Jackson39s political enemies led by Henry Clay made BUS an issue in the election of 1832 hoping to defeat Jackson But the scheme backfired Jackson was overwhelming reelected and began his famous quotWar on the Bankquot Result Jackson39s destruction of BUS opened the banking and financial system to private capitalistic development rather than federal regulation and control 4 Democratic Trends in the Age of Jackson 1 Hamilton government by and for the upper class Jefferson government for the masses by the upper class Jackson government by and for the masses 2 Democratic Developments during the lacksonian Period Voting qualifications and qualifications for holding office become more democratic Popular election of Presidential Electors Selection of party candidates by Convention rather than by Caucus Jackson39s concept of President as quotTribune of the Peoplequot 5 Reform Movements 1820 1860 1 Social Reforms Temperance Prison Reform Care of the Mentally Ill 2 Women s Rights Movement 3 Communitarian Movements 4 AntiSlavery Movements Abolitionlet movementslavery regarded as a moral evil that must be immediately abolished Free Soil movementm opposed the westward expansion of slavery into the Territories 39 Result Created further division between North and South leading to disunion and Civil War 15 XI Territorial Expansion 1845 1850 1 The Ideology of quotManifest Destinyquot f 1 The idea that it was the quotdestinyquot of the US to expand from Atlantic to Paci lo 2 Various historic forms of Manifest Destiny ideology 2 Territorial Expansion 1845 1850 1 The annexation of Texas Texas formerly part of Mexico Texas independence 18361845 US annexation of Texas in 1846 created a crisis with Mexico and led to the Mexican War 184648 2 US acquisition of California and the southwest in 1848 as a result of the Mexican War 3 US acquisition of Oregon territory in 1846 as a result of a compromise with Great Britain 3 Results of Territorial Expansion 1 US expanded to the Pacific 2 Slavery controversy revived Issue Shall slavery be permitted to expand into the territories won from Mexico XII The Road to Disunion 1850 1860 The Controversy Over Slavery 1 Review of the early history of slavery First record in the Virginia colony 1619 In colonial times slavery was concentrated in the South By 1800 slavery had ended in the North quotExpansion of cotton and slavery in the South 1800 1860 Slavery vital to the southern economy 2 Sectional controversy over slavery 1 Growing antislavery movements in the North Abolitionist movementimmediate end of slavery Free Soil movementmo westward expansion of slavery 2 Southern support for slavery rooted in economic and racial reasons 3 The Missouri Compromise of 1820 a defined the status of slavery in territory of the Louisiana Purchase b insured balance slave and free states in US Senate 4 Renewal of the slavery controversy New territory acquired from Mexico raised again the question of expansion of slavery Growing bitterness between North and South 5 The Compromise of 1850 A California admitted as a free sate Remainder of the Mexican Cession organized without reference to slavery The question of slavery would be decided not by Congress but by vote of the local people quotPopular Sovereignty B Texas give up some of its western territory Government of US would assume and pay Texas39 debts C Slavetrading but not slavery itself prohibited in Washington DC Congress would enact a new strict Fugitive Slave Law for the capture and return of run away slaves 6 The break down of national unity The Kansas Nebraska Act of 1854 and the failure of quotPopular Sovereignty quot Civil strife in Kansas The emergence of the Republican Party Dedicated to the principle that slavery should not be allowed to expand into the western territories Many Republicans were also Abolitionists favoring the complete ending of slavery 17 The Dred Scott case 1857 A case decided by the US Supreme Court concerning the freedom or enslavement of Dred Scott The decision seemed to imply that Congress had no power to exclude slavery from the territories The decision pleased southerners but enraged northern anti slavery opinion and increased sectional disunity 3 The Election of 1860 1 Parties and Candidates Republican Party Opposed expansion of slavery into the western territories the Free Soil policy But many Republicans were also Abolitionists Support from Republican party came almost entirely from the North Abraham Lincoln of Illinois chosen as Republican candidate for President Democratic Party Democrats split into northern and southern grOUps Each group nominated its own candidate for President The Democratic vote was divided 2 Distribution of Votes in 1860 Republican A Lincoln 40 of Popular Vote 180 Electoral Votes N Democrat S A Douglas 30 12 S Democrat J Breckinridge 18 72 Union J Bell 125 39 3 Lincoln elected with majority of the Electoral Votes Election held in November 1860 but Lincoln will not take office until 4 March 1861 XIII Secession and Civil War 1860 1865 1 South Carolina the most radical of southern states adopted an Ordinance of Secession terminating the state39s connection with the United States on 20 December 1860 2 Other southern states began to follow South Carolina39s example and to withdraw from the Union In February 1861 the seceded southern states formed a separate government the Confederate States of America 3 The war begins On 13 April 1861 Confederate guns opened fire on Fort Sumter in the harbor of Charleston SC the opening shots of the Civil War In response Lincoln called for volunteers in the Army to restore the Union 4 The quotDark and Bloody Groundquot of the Civil War In all the wars in which US has fought except World War II the total number of casualties is about 300000 In the Civil War 350000 casualties North 164000 casualties South 530000 total 5 The End of the Civil War Gen Robert E Lee Confederate commander surrendered to Gen Ulysses S Grant Union commander on 9 April 1865 On 14 April 1865 President Lincoln was assassinated while attending the theater in Washington DC 6 Reconstruction A bitter period of about 12 years from 1865 to 1876 of racial and sectional readjustment The 13th 14th and 15th Amendments to the Constitution abolished slavery But the question of real equality for all citizens continues to the present as a major challenge to the nation and its people 18 XIV The Impact of Industrialization Business Problem In the later 19th century c 1870 1890 the capacity to produce and distribute goods on a large scale began to exceed the ability to organize and manage big business operations 1 The Development of Corporations As a form of business organization corporations are relative recent in origin Corporations tended to replace the earlier forms of business organization proprietorships a single owner and partnerships an association of several owners 2 Distinctive Characteristics of Corporations features which made them preferable to proprietorships or partnerships as a form of managing big business 1 Legal Characteristics A corporation is based on a legal charter which confers upon it the status of a quotlegal personquot Development of quotholding companiesquot and modern conglomerates and multinational corporations 2 Longevity corporations have extended lifetime 3 Capacity for large capital formation through the sale of shares of stock to investors 4 Limited Liability the liability of an investor for the debts of a corporation is limited to the extent of his investment Financial risk is known and limited 5 Organizational Efficiency Vertical Integration the corporation controls all activities from raw materials to manufacturing to sales Horizontal lntegration merger of competing companies which leads to the formation of bigger business units Bureaucratic organization according to specialized functions production sales purchasing finance and accounting etc 3 Results of the Development of Big Business Corporations 1 Decline of Competition Development of Monopoly control of a market by one seller or Oligopoly a few sellers 2 Concentration of Wealth A study in 1893 showed that 03 of the population owned 20 of the wealth 9 50 90 30 In 2000 the richest 1 of population owns about 40 of wealth 3 Business Abuses leading to government regulation of business activities 4 Exploitation often times wasteful exploitation of natural resources and environmental pollution 5 Development of an Industrial Labor Force 19 XV The Impact of Industrialization Labor 1 Emergence of an Industrial Working Class 1 Percentages of the Work Force 1860 1910 Industrial Workers 18 28 Agricultural Workers 60 31 2 Recruitment of the Industrial Work Force Rural to urban migration Increased labor of women and children 39In 1900 37 of textile workers were under the age of 16 Immigration 1820 1920 37 million immigrants to US 2 Problems of Industrial Workers 1 Decline of craftsmanship Skilled craftsmen were no longer needed when production became industrialized Workers became machine operators doing dull routine and repetitive work 2 Decline of working conditions Unsafe and unhealthy conditions High accident rate perhaps as high as 25 with little or no compensation for injured workers Long hours 60 72 hours per week Low wages Average industrial wage in 1900 20c per hour 1250 per week Wage philoSOphy of employers was to pay workers as little as possible To economize on wages as on any other cost of production Economic cycles Periodic contraction of the economy brought unemployment There were no programs of unemployment compensation Low social status Depersonalization Workers were treated as parts of the mechanical process not as human persons Ethnic prejudices Many workers were immigrants and regarded with prejudice Social Darwinism The ideology of quotsurvival of the fittestquot tended to justify the success of some and the failure of others and to diminish public support for social welfare programs quotLaissez fairequot The dominant economic ideology quotLaissez faire held that it was NOT the business of government to interfere with the operation of the economy This promoted a lack of government regulation of business and a lack of legal protection against business39 abuse of power 3 Workers39 Response Organization of Unions 1 Early labor unions Local craft organizations some dating to before 1860 National Union of Labor 1866 The first national union Not very successful Died out in the depression of 187039s 2 Knights of Labor 1869 quot Membership All workers men and women skilled and unskilled foreign and native born black and white The brotherhood of the working class Aims 8 hour work day Better conditions hours and pay Establishment of Socialism Decline Knights were feared by employers on account of their socialistic aims Haymarket Riot in Chicago on 4 May 1886 gave the Knights a reputation for quotterrorismquot and severely damaged their prestige Internal conflicts of interest between skilled and unskilled workers for example weakened the effectiveness of the organization 20 3 American Federation of Labor AFL AFofL 1886 Membership Skilled craftsmen Organized according to craftPlumbers Union Electricians Union etc 39 Aims 8 hour day improved conditions higher wages Accepted capitalistic system 4 The Struggle of Labor The struggle of labor to obtain a better place in the American capitalistic system was not an easy or peaceful one The later part of the 19th century 1870 1900 was marked by frequent major strikes with violence destruction of property and the loss of life Examples of major strikes Railroad strikes of 1877 the Homestead Steel strike of 1892 and the Pullman strike of 1894 XVI The Impact of Industrialization Immigration and Urbanization 1 Immigration 1 quotOldquot immigration and quotNewquot immigration After 1870 the sources of immigration to the US began to shift from Northern and Western Europe British German and Scandinavian to Southern and Eastern Europe Italian eastern European Slavic and Jewish immigrants The quotnewquot immigrants were generally of different ethnic religious and cultural background from the traditional American population Persons of Southern and Eastern European Origin as Percentage of Immigrants 1860 12 1910 375 2 Number of Immigrants by Decades 1851 60 25 million 188190 47 million 1861 70 20 1890 1900 35 1871 80 23 1900 10 80 3 Results of Mass Immigration Formation of the industrial labor force A large percentage of the industrial labor force 1870 1910 was made up of immigrants from southern and eastern Europe Chinese immigration to California began around 1850 These were the people who did the lowpaying heavy and often dangerous work of later 19th century industrial America Acceleration of urban growth A great majority of the new immigrants settled in the industrial cities Increased diversity of the population The new immigrants were often of different national ethnic linguistic religious and cultural background from the earlier American population Formation of ethnic urban neighborhoods Nativism and AntiImmigrant prejudices Resulted in the beginning of immigration restrictions Prohibition of Chinese immigration began in 1892 restrictions on Japanese immigration after 1900 general restriction of immigration and establishment of the national quota system in the Immigration Act of 1924 2 Urbanization 1 Change from Rural to Urban Distribution of the Population Year Total Pop 96 Urban Rural 1860 315 rail 20 80 1880 50 28 72 1900 76 40 60 1920 106 51 49 Urban incorporated area with population of 2500 or more 21 2 Urban Growth In the ten years between 1880 and 1890 eighty eight of the largest cities in the US doubled in population Table of the Population Growth of Chicago 18401900 1840 5000 1870 300000 1900 1 700000 1850 25000 1880 500000 1860 110000 1890 1000000 In 1880 87 of every 100 persons in Chicago were foreignborn or the children of foreignborn parents In San Francisco 78 of 100 3 Problems Associated with Urban Growth Expanded urban area As cities expand in size problems such as urban transportation became more acute Getting from one place to another by walking became less and less possible Mass transportation became a necessity Environmental pollution The concentration of factories and industrial facilities in cities created massive problems of waste management of air and water pollution and many other environmental problems Crisis of municipal services The rapid expansion of population created problems of adequate municipal services fire and police protection provision of proper water sewage sanitation and transportation services paving lighting and maintaining the streets etc Housing Especially in poor and immigrant areas overcrowded and sub standard housing led to the proliferation of urban slums Increase of crime Corruption of municipal politics Corrupt political quotmachinesquot gained control of the government of many cities The quotmachinequot of quotBossquot Abe Ruef in San Francisco is a good example Beginning of social service and reform movements In the midst of all the problems of urban life especially among the poor and immigrants we can also see the beginning of movements to bring about reform to provide social services for the poor and to iinprove the quality of urban life In these reform movements women began to take a major role 22 XVII The Impact of Industrialization Agriculture Problem In the later part of the 19th century 18701900 American farmers had to contend with problems associated with declining prices for the products which they produced and at the same time fixed costs of their operations and expenses 1 Problem of Declining Prices 1 Prices 1875 1895 Cotton 15c lb 066 1b Wheat 106 buquot 641 bu Corn 43c bu 296 bu Bushel 352 liters dry measure 2 Causes of Declining Prices A Development of an international market for agricultural commodities This condition was due to a Transportation developments The construction of the Suez canal in Egypt and a transcontinental railroad system in the US connected markets more efficiently 39 b Communication develOpments Development of a worldeide telegraph network c Emergence of international market exchanges London and New York in stocks banking and finance Manchester in cotton Liverpool in wheat where prices are set by international market conditions A world economy was emerging during this period of time B Increase of worldwide commodity output a Opening of new areas of production Wheat in western US and Canada in Australia and southern Russia Cotton in India and Egypt In the US between 1870 and 1900 425 million acres of new farmland was brought into cultivation 13 Increased domestic production in the US due to mechanization 2 Problem of fixed costs 1 A major part of the problem of fixed costs was due to debt To operate effectively American farmers had to invest in machinegy and in land For both of these investments farmers had to borrow money from banks leading to debt and interest as fixedcosts Whatever other economies a farmer might practice to try to reduce his costs he could not avoid the fixed costs of debt 2 Strategies for dealing with the problem Restrict output By reducing supply prices might rise This strategy was available to large corporations with oligopolistic markets But not to farmers where the decision making which controlled output was highly decentralized Increase output This option only makes the situation worse An increase of supply relative to demand only lowers prices 3 Farmers Response to Problems To Organize 1 The Granger Movement 1870 18 Began as a social organization but became an organization for political action Through the political influence of the Granger organizations farmers were able to move state legislatures to enact laws regulating the rates and services of various business such as railroads grain storage facilities and slaughter houses on which farmers depended to move their products into the market system These laws were enacted at the state level and became known as quotGranger lawsquot The business being regulated by these Granger laws challenged their legalityin the courts In the case of Munn vs Illinois 1877 the US Supreme Court upheld the constitutionality of these laws But ten years later in the case of Wabash RR vs Illinois 1887 the US Supreme Court reversed itself declared that the former Court had been quotin errorquot and declared Granger laws unconstitutional 23 Interstate Commerce Act The negation of gate laws regulating business led to the enactment of legislation at the national level In 1887 under pressure from agricultural interests Congress passed the Interstate Commerce Act the first piece of national legislation regulating private business in the name of public interest 2 The Populist Movement 1890 1896 The decline of the Granger movement led to the rise of the Populist movement and the formation of a national political party The Peoples Party of America generally known as the Populist Party The Populist Party Platform of 1892 At a national convention in 1892 the Populist party nominated a candidate for President and announced its support for the following programs a Income tax b Popular election of US Senators c Government ownership of transportation and communications systems d Other measures such as the 8 hour day in industry term limits for President and Vice President restrictions on immigration and e Free Silver 3 Free Silver The Money Issue Definition of basic terms a Inflation an economic condition in which the value of money relative to goods is declining b Deflation an economic condition in which the value of money relative to goods is increasing Relative benefits As a general rule deflation tends to benefit creditors and inflation tends to benefit debtors As debtors Populists largely made up of farmers favor in ation The monetary policy of the national government since about 1870 had largely been de ationary a The retirement of paper dollars unsupported by gold which had been issued as emergency financing of the Civil War reduced the amount of money in circulation by about 450 million b The demonitization of silver in 1873 further reduced the volume of the money supply by no longer using silver as part of the monetary system Gold became the only standard of the money supply c As a result of these deflationary measures the amount of money in circulation between 1865 and 1890 dropped by about 10 During the same time however the population doubled and the volume of business tripled quotFree Silverquot was a program of the Populist party to inflate the money supply by restoring silver to the monetary system Gold plus silver would result in a greater volume of money than gold only Since in ation tends to benefit debtors the quotFree Silverquot idea was behaved to be a way to make it easier for farmers to repay their debts 4 The Election of 1896 The Populists had done suprising well in the presidential election of 1892 The economy had gone into a depression in 1893 All eyes turned to the 1896 contest 1 Candidates and Issues The Republicans chose William McKinley of Ohio and supported the gold standard of money The Democrats chose William Jennings Bryan of Nebraska and supported Free Silverquot The Populists faced with a difficult decision decided to join with the Democrats in support of Free Silver and ended their existence as a separate party 2 Result a massive victory for the Republicans Bryan failed to carry the working class vote in the East but even more surprising he lost states in the mid West and far West where he should have done well With the return of economic good times farmers deserted the populist issues 24 XVIII Foreign Affairs 1898 1914 Thesis By 1895 the United States had become the world39s largest industrial power and began to take a more active role as a quotGreat Powerquot in world affairs 1 The SpanishAmerican War 1898 1 Causes of the war S Background of the Cuban struggle for independence from pain The role of quotyellow journalismquot and public opinion in US involvement in CubanSpanish affairs The crisis in relations with Spain a The deLome letter A private letter from the Spanish ambassador in Washington DC to a friend in Cuba critical of President McKinley was stolen from the post office and publish in a NY newspaper on 2 February 1898 Raised anger of public Opinion against Spain b The explosion of the US battleship quotMainequot in Havana harbor on 15 February 1898 260 American sailors dead Newspapers proclaimed Spain s responsibility for the attack Outraged public opinion demanded war with Spain To this day the real cause of the explosion of the quotMainequot is unknown c Congress recognized the independence of Cuba and adopted the quotTeller amendmentquot which denied any US territorial interest in Cuba d Spain declared war on US Congress responded with a declaration of war against Spain 2425 April 1898 2 The War Adm Dewey39s victory at Manila Bay 1 May 1898 American invasion of Cuba War ended in July after 110 days 3 Results of the war US acquired the Philippines Guam and Puerto Rico from Spain Paid Spain 20 million US became a colonial and imperialist power 4 Ideological aspects of US foreign policy 39 A Foreign policy concerns in the statement of President McKinley about policy toward the Philippines 39 To protect American national honor To protect US economic interests Racial amp cultural attitudes belief in an ideology of quotsuperior peoplequot and quotinferior peoplequot Idealistic and naive desire quotto do goodquot in the world B Statement of Senator Albert Beveridge shows concern with foreign policy to protect US economic interests In order to continue our economic growth US must develop foreign trade 2 US Foreign Policy in Latin America 1 Theodore Roosevelt39s quotBig Stickquot Policy In a presidential message of December 1904 President T Roosevelt announced a corollary to the Monroe Doctrine of 1824 Under this policy the US assumed a police power to control affairs in Latin America 2 In 1903 the US acquired control of the canal project in Panama 3 Since 1898 the US has repeatedly intervened in various Latin American countries to in uence affairs 4 quotDollar Diplomacyquot In this policy the US has used its economic in uence instead of or in addition to its military power to influence affairs in Latin America and other places 25 3 US Foreign Policy in the Far East 1 China Situation in China Internal instability and aggressive pressure from foreign powers created the possibility that China might be divided up into colonial spheres of in uence US Policy The US wanted the economic benefits of trade with China but without the responsibilities of territorial colonialism US experience as a territorial colonial power in the Philippines had been a bitter experience The quotOpen Doorquot Policy The US pr0posed that there be an international agreement a to preserve the political independence and territorial unity of China and b that the trade of China be open to all interested nations on an equal basis 2 Japan Opening of Japan American action in 1853 54 forced Japan to open up to outside trade and commerce after centuries of isolation During the Meiji period 1868 1912 Japan began a program of rapid modernization and industrialization Lacking the basic raw materials for an industrial economy in the home islands Japan adopted a policy of expansion by military force to secure raw materials and markets in Korea and Manchuria in northern China Con icting interests with Russia for control of economic resources in Manchuria led to the RussoJapanese War of 1905 Japan in icted a major defeat on Russia President Theodore Roosevelt acted as host and mediator in peace negotiations US Japanese Disagreements These issues form the background of American Japanese disagreements that eventually reached a crisis in 194041 and resulted in war a US felt that its economic interests in Asia were threatened by Japanese expansion b Anti Japanese discriminations in California offended Japan39s sense of national pride and honor c Superficial agreements smoothed over some of the problems between the two nations but mutual suspicions remained Documents Related to American Foreign Policy 1898 1914 Document 1 An example of how quotYellow Journalismquot was portraying Spanish misrule in Cuba From an editorial in the New York World 1898 quotBlood on the roadsides blood in the fields blood on the doorsteps blood blood blood The old the young the weak the crippled all are butchered without mercyIs there no nation wise enough brave enough and strong enough to restore peace in this blood smitten landquot Document 2 A statement attributed to President William McKinley describing the process by which he came to the conclusion that the United States should take possession of the Philippines quotThe truth is I didn39t want the Philippines and when they came to us as a gift from the gods 1 did not know what to do about themI sought counsel from all sides Democrats as well as Republicans but got little help I thought first we would take only Manila then Luzon then other islands perhaps also I walked the floor of the White House night after night until midnight and I am not ashamed to tell you gentlemen that I went down on my knees and prayed Almighty God for light and guidance more than one night And one night late it came to me this way I don39t know how it was but it came ll that we could not give them back to Spain that would be cowardly and dishonorable 2 that we could not turn them over to France or Germanyour commercial rivals in the Orientwthat would be bad business and discreditable 3 that we could not leave them to themselves they were unfit for selfgovernment and they would soon have anarchy and misrule over there worse than Spain39s was and 4 that there was nothing left for us to do but to take them all and to educate the Filipinos and uplift and civilize and Christianize them and by God39s grace do the very best we could by them as our fellow men for whom Christ also died And then I went to bed and went to sleep and slept soundlyquot Document 3 An extract from a speech by Senator Albert Beveridge to the New York Chamber of Commerce in 1900 concerning America39s vital interest in developing foreign trade especially in the markets of Asia quotAmerican factories are making more than the American people can use American soil is producing more than they can consume Fate has written our policy for us the trade of the world must and shall be oursWe will establish trading posts thoughout the world as distributing points for American products We will cover the ocean with our merchant marineGreat colonies governing themselves flying our flag and trading with us will grow about our posts of trade Our institutions will follow our flag on the wings of our commerce And American law American order American civilization and the American flag will plant themselves on shores hitherto bloody and benighted but by these agencies of God herceforth to be made beautiful and brightquot 26 XIX The Progressive Era 1900 1916 20 Thesis Progressivism was a complex movement that cut across traditional geographic political economic and social lines having a common interest in Reform Progressivism was an attempt to deal with some of the problems that had been created by industrialization through reform For convenience of organization this topic will be divided into Social reforms Economic reforms and Political reforms 1 Social Reforms l Reforms to improve conditions of urban life To improve the standards of housing for the poor to improve the quality of municipal services fire and police protection water sewage street lighting etc 2 Reforms to uphold traditional morality Clean up prostitution drugs and crime Restrict or prohibit the consumption of alcoholic beverage Led to the adoption of national prohibition by the 18th Amendment 1919 3 Social Welfare programs Established by state legislation Regulation of the labor of women and children Establishment of programs of accident and unemployment insurance for workers Regulation of working conditions in factories In New York in response to the disastrous Triangle fire 25 March 1911 which took the lives of 146 female workers 2 Economic Reforms 1 Reform of the tax system 16th Amendment 1913 established Income Tax 2 Laws of the national government for the regulation of business Pure Food and Drug Act 1906 The first national legislation to regulate standards of food production and to control drugs by prescription Laws to prevent monopoly Competition was required to be the legal model of the American economy 39 Laws to establish various regulatory commissions such as the Interstate Commerce Commission and the Federal Trade Commission Members of these commissions were appointed by the Prcsident with the consent of the Senate and had power to conduct investigations and establish rules and regulations having the force of law 3 Regulation of the banking system The Federal Reserve Act 1913 created the present Federal Reserve System FED A Structure of the Federal Reserve System National Board of Governors The National Board of Governors consists of 7 members who are appointed by the President with the consent of the Senate Five of these 7 serve staggered terms of 14 years each The Chairman and Vice Chairman serve for terms of 4 years each and may be reappointed Twelve Federal Reserve Regions California is in the 12th FED region and the principal FED bank for this region is in San Francisco B Members of the Federal Reserve System The Federal Reserve System is a quotbankers39 bankquot It does business only with member banks All banks which hold their charter of incorporation from the national government must be members of the FED Other banks having state or private charters may be members if they meet certain qualifications C Functions of the Federal Reserve System a Fiscal agent of the US government The FED is the government39s banker It receives and pays out funds on behalf of the Treasury 27 b Bank of issue The paper bills in circulation are issued by the FED and are designated quotFederal Reserve Notequot c Clearing house operations Every member bank is required to maintain an account with the FED Bank in its region A check written by an individual with an account at commercial bank X payable to an individual with an account at commercial bank Y is cleared through the FED regional clearing house by debit and credit of the accounts of the respective commercial banks who then debit or credit the accounts of the individuals involved No exchange of cash is involved It39s all done by book keeping Operations among the FED and the member commercial banks d Cash pool for emergencies Every member bank must keep a cash reserve account with its regional FED Bank as a reserve pool against emergencies This function is probably less important today now that individual accounts in commercial banks are insured by an agency of the federal government FDIC e Influence economic activity Probably the most important function of the FED in today s economy The FED influences the economy by Variation of the discount rate The discount rate is the rate of interest charged by the FED on loans to member banks Raising the discount rate has the effect of slowing down economic activity Lowering the discount rate has the effect of stimulating economic activity Variation of reserve requirement Seldom used at present Open Market Operations If the FED buys government securities in the financial markets the effect is to stimulate economic activity If the FED sells government securities the effect is to slow down economic activity 3 Political Reforms The general intent of these reforms was to make the American political more democratic and responsive to the will of the peOple 1 Reforms at the national level 17th Amendment 1913 provided for the popular election of US Senators 19th Amendment 1920 extended the right to vote to women Women39s suffrage 2 Reforms at the state level Initiative A political process which enables the voters to enact laws Referendum A political process which enables voters to approve or disapprove of laws made by legislative bodies state legislature or city council Recall A political process which enables voters to remove a public official from office immediately before hisher legal term has been completed Direct Primary A political process which enables the registered voters in each political party to chose that party39s candidates for office in the general election Secret Ballot A political practice which protects the privacy of the voter 23 XX World War I and the Lost Peace 1914 1920 1 World War I 1 Background and Causes Ageold rivalries and hostilities among European powers Rise of Germany as a major military and industrial power Emergence of rival power blocs Central Powers Germany and Austria 39 Allied Powers France Russia Great Britain 2 Crisis and Outbreak of War Assassination of Archduke Francis Ferdinand heir to the throne of Austria at Sarajevo on 28 June 1914 Threats demands and mobilization for war War 1 August 1914 3 The Failure of American Neutrality President Woodrow Wilson39s declaration of neutrality on 4 August 1914 The failure of neutrality Although the President called upon the American people to be neutral in thought as well as in deed partialities soon emerged promoted by a Attachments of culture and tradition favored sympathy toward France and Britain 39 b Financial involvement War loans from American bankers and the sales of war goods on credit to GB and France by American industries created a strong financial interest in the outcome of the war c Violations of American neutral rights Especially German submarine warfare The issue of submarine warfare The German navy had a technological lead in submarine warfare a new weapon of war in WW I a In February 1915 the German government declared a quotWar Zonequot around Britain Any ship within the war zone was liable to attack without warning by German submarines b On 7 May 1915 the British passenger ship quotLusitaniaquot was sunk by a German submarine 128 American were among the dead The US government strongly protested attacks on merchant vessels and reasserted US claims to neutral rights 0 In June 1915 the German government concerned about American threats agreed to certain restrictions on submarine warfare d After an interlude of restricted submarine warfare on 1 February 1917 the German government announced that it was resuming unrestricted submarine warfare Even if this move brought the US into the war the German government hoped to win by cutting off the flow of supplies to Britain by sea The United States enters the war a German submarine attacks in the Atlantic during February and March brought heavy losses to US and GB shipping b Interception of the Zimmermann Note A message from the German Foreign Office in Berlin to the German ambassador in Mexico City outlined a plan to bring Mexico into the war on the German side with a promise to restore to Mexico the territories taken by the US in the Mexican War c Wilson requested and Congress passed a Declaration of War in April 1917 The US entered the war 4 Wilson39s Peace Proposals Wilson was convinced that only a negotiated peace would create a just and lasting peace In a speech before Congress on 22 January 1917 he called for a quotpeace without victoryquot and called for ending the war by negotiation 29 Wilson39s quot14 Pointsquot program Proposed in a speech before Congress on 8 January 1918 as a basis for a negotiated peace settlement a End of secret diplomacy All treaties and international agreements should be open and public and arrived at by open and public negotiations 13 Freedom of the seas The right of neutral nations to travel the world39s oceans without being attacked by nations at war This was an old point of American foreign policy going back to Washington39s administration c Removal of economic trade barriers International quotfree tradequot A kind of global extension of the quotOpen Doorquot policy d International arms reduction e quotSelf Determination quot The right of all nations great or small to determine for themselves the kind of government under which they should live An anticolonist policy f Formation of a League of Nations An international associationr of nations to maintain peace An idea especially important to President Wilson 5 The Military Course of the War Stalemate on the Western Front After a series of 39 extremely bloody battles in which neither side was sufficiently strong to destroy the other the war on the western front settled down to a grim stalemate of trench warfare Collapse of Russia Under the strains of war the tsarist regime in Russia collapsed and Tsar Nicholas abdicated on 15 March 1917 This opened the way for a takeover of power by Lenin and the Bolsheviks in October 1917 In March 1918 the communist government withdrew from the war signing the Treat of Brest Litovsk which gave Germany everything it wanted in the east US entry into the war in April 1917 Provided the money material and manpower that turned the balance of the war Armistice A quotcease firequot agreement to take effect on 11 November 1918 World War I was an extremely bloody war It was the first large scale war to be fought by industrially equipped armies A number of new and highly destructive weapons made their first appearance in W I long range artillery malchinerguns tanks poison gas airplanes submarines Over 20 million dead military an cm ran 2 The Lost Peace 1918 1921 1 The Paris Peace Conference Delegates from more than fifty nations met in Paris from January to June 1919 but Wison of the US Lloyd George of GB Clemenceau of France and Orlando of Italy the quotBig Fourquot as they were called made the most important decisions 2 Wilson39s idea of a negotiated quotpeace among equalsquot was rejected by the British and French Germany was excluded from the conference 3 The Treaty of Versailles A harsh settlement including a a quotwar guiltquot clause which held Germany responsible for having started the war 39and b a quotreparationsquot clause which demanded large monetary payments from Germany to the victorious allies for costs and damages of the war Formation of a League of Nations In return for support for his League of Nations idea Wilson was forced to agree to British and France demands for reparations The US asked for no reparations 30 4 The Treaty of Versailles and the United States Senate The Constitution specifies that no treaty shall become law unless ratified by 23 vote of the Senate Divisions in the Senate The Senate divided into three groups a Supporters Senators in favor of the treaty mostly Democrats following the leadership of President Wilson b Reservationists A group made up mostly of Republican senators who wanted to make certain changes in the treaty c Irreconcilables A group of senators mostly Republicans who were totally and irreconcilany opposed to the treaty in any form Wilson unwisely stubbornly refused to make any compromises about the treaty and insisted that it must be ratified exactly as it was During a nation wide speaking tour to build public support for the treaty Wilson had a stroke and collapsed on 25 September 1919 During his long recuperation his wife exercised many of the day to day functions of the office of President Vote in the Senate a A vote on the treaty with reservations in November 1919 resulted in 39 votes YES and 55 votes NO A number of Supporters following Wilson39s advice voted N0 b A vote on the treaty without reservations in March 1920 resulted in 49 votes YES and 35 votes N0 A majority but not a twothirds majority The US rejected the Treaty of Versailles and with it rejected membership in the League of Nations Disillusioned with the outcome of a war which the American people had been told would quotmake the world safe for democracyquot and bring about a better world of freedom peace and human dignity the United States began to withdraw from world affairs and during the 192039s retreat into quotIsolationquot 31 XXI The 1920 s A Decade of Change In the decade of the Twenties the United States experienced a period of major change and glittering prosperity which ended with the crash of the stock market in 1929 and the collapse of the economy into the worst and longest depression in its history 1 Political Change in the 192039s 1 Collapse of the quotOld Orderquot In the aftermath of WW I the quotOld Orderquot that had ruled EurOpe for centuries collapsed and was swept away In Russia the tsarist regime collapsed and in its stead emerged Soviet Communism 0 The old Austrian empire collapsed and out of its ruins a number of small unstable new nations emerged in central and eastern EurOpe The old German empire collapsed An unstable Weimar republic was subverted and Hitler and the Nazi party came to power The old Turkish empire collapsed and among its fragments the present disorders of the Middle East emerged Britain and France although victorious in the war were left weak and disordered 2 The Search for a quotNew Orderquot Out of the collapse of the old order three different systems presented themselves as models for a new order Communism Fascism and Democracy The 20th century has been an uncertain and often violent contest as to which of these shall prevail 2 Changes in Manners and Morals 1 The Jazz Agequot A rejection of traditional standards and the pursuit of money and pleasure 2 The quotNew Womanquot Changes in women39s fashions Changes in family structure a Increase in the divorce rate b Birth control controversy I 3 Emergence of quotMass Culturequot Mass circulation magazines and newspapers spectator sports and mass entertainment such as movies and radio 0 3 Economic change A decade of prosperity 1 Changes in Industry Improved hours and conditions By the end of the 192039s a significant portion of Arnerican industry had adopted the 8 hour work day the 5 day work week and 2 weeks of paid vacation for workers Improved wages Led by Henry Ford in the automobile industry employers began to accept a new philosophy of wages Instead of the old idea of paying workers as little as possible the new idea was to pay workers enough to enable them to become consumers of the goods they produced Increased productivity Between 1920 and 1930 productivity the output per worker per hour of work increased by about 30 This was due to a Better management American industry was increasingly managed by men trained in university business schools b Technological advances Assemblyline production Henry Ford s assembly line production of automobiles became world famous The amount of time to assembly an automobile was reduced from 12 30quot to 139 30quot Mass production reduced costs and Opened the way for the mass consumption of automobiles Increased use of electrical energy The age of steam power was being replaced by the age of electrical energy 32 2 Emergence of a Consumer Economy An economy based on mass production and mass consumption Henry Ford was one of the first industrialists to promote the idea of paying workers enough to enable them to become consumers of the goods they produce When other businessmen began to adopt this practice the economy was transformed From being an economy geared to the production of heavy industrial goods producers39 goods the economy became oriented to the production of consumer goods The technological capacity to produce on a mass scale became linked to a capacity to consume on a mass scale The Amsrican economy was the first economy of mass consumption beginning in the 192039s All modern developed economies now are largely consumer based Among the new mass consumer goods of the 192039s were a Light consumer goods Goods such as prepared foods clothing cigarettes wrist watches synthetics such as rayon nylon pyrex and plastics b Heavy consumer goods Durable goods such as furniture refrigerators electrical appliances But especially three major new durable consumer goods industries developed in the 1920 s telephones radios and automobiles Telephones Radios 1900 13 million sets 1922 3 million sets 60 million in sales 1930 20 million sets 1929 12 million sets 842 million in sales 0 The Automobile Industry By 1929 there were 23 million automobiles in the USuone car for every 5 persons in the population In GB 1 auto for every 43 persons In italy 1 auto for every 325 persons In Russia 1 auto for every 7000 persons Mass production of automobiles by the assemblyline process begun by Henry Ford reduced costs and with higher wages and installment buying the automobile became an item of mass consumption in America The automobile industry was the quotdynamicquot sector of the emerging consumer economy Mass production mass consumption of automobiles stimulated the growth of a host of related industries steel rubber leather glass paint oil and gasoline highway construction and service businesses A quotripple effectquot on the economy 3 The Distribution of Prosperity 1920 29 Industrial wages increased about 10 Corporate profits 62 Corporate dividends 65 The largest increases were going to the upper income brackets Income Distribution Richest 1 of Population Richest 5 of Population 1919 122 of Income 245 of Income 1923 13 27 1929 19 335 In 1929 the richest 5 of the population received about as much income as the bottom 50 of the population 4 Disposition of Income The excess income and corporate profits received by the upper income brackets tended during the 192039s to flow into increasingly speculative investments in the Stock Market Speculation is defined as buying based on an expectation of an increase in the stock market price rather than the actual value or earning potential of the company 4 The Rise and Fall of the Stock Market 1 The New York Stock Exchange was founded on 11 May 1792 In the jargon of Wall Street there are two kinds of investors Bulls and Bears Bulls are investors whose outlook is optimistic now is the time to buy stocks will be higher tomorrow Bears are investors whose outlook is pessimistic now is the time to sell stocks will be lower tomorrow 33 2 The Big Bull Market of the 192039s Market Trends 1919 192123 Postwar readjustment 1923 1927 Rising quotBull Marketquot 1927 1929 quotThe Big Bull Marketquot Stock Market Prices Price of 1 share of Radio Corporation of America RCA stock during the month of March 1929 March 3 94 12 March 11 138 12 9 108 12 160 up 21 12 overnight 10 120 12 20 178 Rising prices attracted an increasing amount of a Speculative buying b Marginal buying buying with borrowed money The Stock Market was becoming overly weighted with investments which depended on a continued upward trend If the market should turn downward a set of potentially dangerous factors would be set in motion 3 The Crash of 1929 There were signs of volatility in the market in September and October But overall prices stabilized Thursday 24 October 1929 A heavy selling wave hit the market Prices dropped Buying by big investors stabilized the market but investors were nervous Calls over the weekend for more quotmarginquot increased investor39s worries Tuesday 29 October 1929 quotBlack Tuesdayquot Massive panic selling hit the market and prices collapsed The market never really recovered Through the winter of 1929 30 there was a continued downslide of prices Value of All Stocks on the NY Exchange 1 September 1929 89690000000 1 July 1932 15633000000 A loss of 74 billion The collapse of the stock market began to spill over into the rest of the economy and to create a general depression The quotTitanicquot theory of the Depression 34 XXII Franklin D Roosevelt and the New Deal 1932 1940 The collapse of the stock market began to spill over into other sectors of the esonomy bringing about the Great Depression of the 193039s Elected president in 1932 Franklin D Roosevelt led a controversial program of reform known as the quotNew Dealquot to try to relieve some of the effects of the depression and to revitalize the American economy 1 The Great Depression 1 Magnitude of the Depression New Capital Investment dropped from 10 billion in 1929 to only 1 billion by 1932 Business Failures Between 1929 and 1932 over 100000 businesses large and small went bankrupt and 8000 banks with deposits of over 2 billion failed Corporate Earnings drOpped from 84 billion in profits in 1929 to over 56 billion in losses by 1932 Industrial Production in 1930 was 26 below thelevel of 1929 and by 1932 had drapped to only 51 of 1929 level World Trade Exports in 1932 were 67 below the level of 1929 Total National Income dropped from 81 billion in 1929 to 49 billion in 1932 Between 1929 and 1932 Industrial Wages drOpped 60 average Salary dropped 40 and Farm Income dropped 46 Unemployment 1929 32 1931 159 1933 249 1930 87 1932 236 Continued over 20 until 1936 2 President Herbert Hoover and the Depression When the Depression began in 1929 1930 Herbert Hoover was president A conservative Republican from a successful business background Hoover was firmly committed to the economic philosophy of quotlaissez fairequot He believed that there was little the government could or should do that we must ride out the hard times and wait for the economy to correct itself Hoover deeply believed in quotrugged individualismquot and selfreliance and his own life was an example of these traditional American values Born 10 August 1874 on a farm in Iowa he was left an orphan at age 8 was brought up by a relative in California won a scholarship to Stanford University graduated with a degree in mining engineering made a fortune by age 35 and had achieved international recognition as a successful businessman and humanitarian before being elected president in 1928 He was the ideal of the quotselfmade manquot A poor orphan boy who by his own effort and hard work had become rich and famous 3 The Election of 1932 Hoover kept issuing optimistic statements that the worst appeared to be over and things would get better soon But instead the Depression kept getting worse and worse By the time of the 1932 election many citizens were ready for a change and voted heavily for the Democratic party candidate Franklin D Roosevelt The Democrats also gained a majority in both houses of Congress Political control was now in their hands 39 2 Franklin D Roosevelt and the New Deal 1 Two men of more different background and character than Hoover and Roosevelt would be difficult to find Franklin Roosevelt FDR was born 30 January 1882 at his family39s estate along the Hudson river at Hyde Park New York The son of an old wealthy and socially prominent family he had all the advantages of wealth and status Sent to a private school for boys he went on to graduate from Harvard in 1904 and in the following years married his cousin Eleanor Roosevelt niece of President Theodore Roosevelt Bored with being a lawyer he went into politics served in the state legislature in New York and was appointed Assistant Secretary of the Navy by President Wilson Obviously being prepared by the Democratic party for higher office he became ill with poliomyelitis in August 1921 while vacation at the family summer home He was 38 years 35 old His legs were paralyzed He could not walk It seemed his political career was over But he refused to give up Encouraged by his wife he spent the next seven years trying to rebuild his health Although he was never able to walk he could stand upright with the support of heavy braces on his legs In 1928 he made his political comeback and was elected Governor of New York and in 1932 won the presidency As president FDR moved decisively upon a program of recovery and reform that became known as the New Deal 2 Banking When FDR took office in March 1933 a wave of bank failures was sweeping the nation nervous depositors were withdrawing their money and the system was on the verge of total collapse I As an emergency measure FDR issued a presidential order closing all banks for a period of 6 days Congress was called into special session and in record time passed legislation which created the Federal Deposit Insurance Corporation FDIC which insured individual deposits in commercial banks up to 5000 Now up to 100000 In a quotfireside chatquot to the nation over the radio FDR assured people that their money was safe in the banks and managed to restore public confidence Other laws reforming the banking system were later enacted 3 Industry In June 1933 Congress passed the National Industrial Recovery Act The program was to be administered by the National Recovery Administration NRA The act permitted formation of industry wide cartels with power a to set industry wide production quotas b to divide markets and c to fix prices so that individual businesses would be guaranteed a portion of the market in a depressed economy In return businesses were expected to maintain employment and wages The NRA program was administered in each industry by a Board composed of representatives from business labor and government The NRA program was a form of state socialism The closest the US has ever come to national economic planning by government It did not work well for a number of reasons Businessmen especially were strongly opposed to it and proclaimed that FDR was leading the country down the path to socialism and ruin The NRA program was declared unconstitutional by the US Supreme Court in the case of Schechter vs US 1935 The administration made little attempt to salvage the program and it was discontinued 4 Agriculture In May 1933 Congress passed the Agricultural Adjustment Act The New Deal39s agricultural program was to be administered by an Agricultural Adjustment Administration AAA The AAA program established a system of price supports which guaranteed farmers a basic price for their crop provided they would agree on an individual basis to limit production The idea was to stabilize agricultural prices by reducing supply The AAA program was declaredunconstitutional by the US Supreme Court in the case of Butler vs US 1936 The administration revised the plan to meet the Court39s objections and the program was continued 5 Public Works Programs The New Deal establish various programs of public works funded by the national government to provide jobs for those who could not otherwise find employment Government as quotemployer of last resortquot The Civilian Conservation Corps CCC provided jobs for young men from the cities to work in the countryside on a variety of conservation programsplanting trees improving facilities in National Parks soil conservation etc The Tennessee Valley Authority TVA engaged in large scale development programs in an area Spread over three states constructing hydroelectric power facilities and carrying out extensive flood control and soil conservation projects quot Hundreds of other programs some very large others quite small engaged in the construction of dams roads bridges harbors parks and recreational facilities and government buildings such as court houses and post offices There was also a program for the arts providing employment for artists writers actors and mjusicians 36 6 Social Security Established by act of Congress in 1935 the Social Security system was the rst national public welfare program in the US Such programs had been in existence in some other countries however from much earlier timas The program established Retirement benefits for persons 65 years and older Accident and unemployment insurance programs Programs of aid to dependent children 7 Labor The New Deal labor program was embodied in the National Labor Relations Act of 1935 Also known as the Wagner Act The program a Encouraged the organization of unions of industrial workers and b guaranteed certain legal rights to labor unions including the right to engage in quotcollective bargainingquot with management In return organized labor strongly supported FDR the New Deal and the Democratic party 3 Analysis and Evaluation of the New Deal 1 The New Deal established a new role for government in supervising the economy and promoting public welfare It was a major retreat from the ideology of quotlaissez fairequot 2 The New Deal redefined political issues and party boundarieseven to the present time It was extremely controversial arousing strong opposition especially from business interests On the other hand it attracted support from organized labor minority groups and liberals 3 Economic Principles of the New Deal The New Deal was experimental pragmatic and piecemeal rather than a comprehensive ideological and systematic program In this respect it was a re ection of FDR39s personality and style The New Deal was influenced by the economic ideas of John Maynard Keynes a A new theory of Depression Depressions were not necessarily self correcting and might be of indefinite duration b Concept of Gross National Product GNP Gross National Product is defined as the total final market value of all goods and services produced by an economy in a given period of time GNP is calculated by 4 categories 1 Consumer expenditures all the goods and services purchased by consumers 2 Investment expenditures all the goods and services purchased by business 3 Government expenditures all the goods and services purchased by government 4 The value of Exports minus the value of Imports In times of Depression Items 1 2 and 4 dry up as the economy contracts Government by increasing its expenditures even by deficit spending if necessary can pump money into the economy to revive it Keyensian economics is an economics of government spending as a means of overcoming Depression quotGovernment as spender of last resortquot This is the idea behind much of the New Deal spending programs Using GNP as a measure how successful was the New Deal in overcoming the Depression See the chart following quotMa C m Bx1m MOOquot W40 160 l6 0 Mo mo 00 quot


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