The United States in the World Economy, 1800-1900• Tariff Policy and the rise of Northern Manufacturing, 1800-1830– Embargo of 1807 and War of 1812 stimulate industry– Problems for new manufacturers after the war.– The protective tariff and government revenue– Textiles in MA (Lowell, Lawrence, Fall River).• Origins of the Civil War, 1830-1860– England’s demand for raw cotton.– “Short-staple” cotton and the cotton gin.– South wants free trade, North wants protection– Stalemate in CongressImpact of the US on the World Economy, 1865-1900• Midwest Grain and the “First” Great Depression– Technological change (transportation, communications, farming) and growth of world trade– Shift in location of food production: US the world’s “bread basket” – Responses to the adjustment problem in Europe• US as an Industrial Power– Effects of the Railroad boom– US manufactured goods replace imports– US manufactured exports to Europe– Responses to the adjustment problem in Europe: protectionism, “New” ImperialismConflict over the Gold Standard, 1873-1896• The Gold Standard as a Pillar of Global Economy– To be on a gold standard, a nation committed to buy and sell itsnational currency for fixed amount of gold.– With many on gold standards, a system of “fixed foreign exchangerates” was established.– The international gold standard facilitated foreign trade and investment by eliminating “foreign exchange risk”Conflict over the Gold Standard (cont.)• Conflict in the US over the Gold Standard– US goes off gold during the Civil War (Greenbacks)– conflict between groups over whether to return to gold– advocates of gold: eastern business, banking and mercantile interests.– opponents of gold: farmers, railroads, silver mining interests– stalemate in Congress– role of new gold discoveriesTablesTable 1: U.S. Cotton Production 1791-18601791 1831 1860Million lbs. 2.0 385.0 1,650Percent of world total 0.4 49.6 66Table 2: World Wheat Production (percent of world total)1860 1880 1900UK 10 5 2Germany 65 4US 11 19 25Table 3: Iron and Steel Production (million tons)1850 1870 1900UK 2.3 6.9 13.5Germany -- 2.1 16.2US -- 2.3