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The Development of the American Economy

The Development of the American Economy

Explain Henry Clay’s American System. How did this promote a spirit of nationalism in America? (100-200 words)

Henry Clay championed the economic model, which he called the American System. The model was based on the idea that America had to develop a nationalist economy, an economically self-sufficient country. Before the American System, the country depended heavily on the exportation of goods, which made the country vulnerable in cases of conflicts with foreign countries. One example is during Europe’s Napoleonic Wars, when there was a disruption in the trade of goods, and America’s economy suffered. Subsequently, there were three main concepts of this economic model: the renewal of the national bank, the implementation of protective tariffs, and improvements in internal transportation (Schultz, 2017).

Clay stated these three concepts would promote nationalism in the following ways: the national bank would provide resources for economies all over the country. Secondly, the tariffs’ primary role was to protect the manufacturers in America from foreign competition. The tariffs made the international products more expensive than the domestic products, and it would lead to a growth in the domestic markets, which in turn would spur growth in domestic industries (Schultz, 2017). Further, the third concept of transportation improvements was to help goods across the country. While the Southern and Western regions, agricultural parts, felt the tariffs and banks only benefited the Northern regions’ industrial parts, they were against the tariffs and banks. However, with the transportation improvements all across the country, all regions could trade with each other the different products that they supplied (Schultz, 2017). This would create a nationalist economy.

Discuss America’s transportation revolution in the first half of the 1800s. What role did government play in the development of roads, canals, railroads, and steamboats? (100-200 words)

The 19th century brought with it several factors that influenced people to want to move and settle in different places all across the country. One of the factors was the Westward expansion of America, which promised land and more resources to Americans, and the implementation of Clay’s American System, which required the movement of goods across the country. However, there were no effective modes of transportation except boats, which depended on manual power. However, an American inventor, Robert Fulton, introduced the steamboat to America in 1807. Nevertheless, even though they were an improvement that did not depend on wind, current or animal, or human labor, the steamboat was still slower and could not effectively travel through the smaller streams. Subsequently, in 1811, Congress approved the construction of the national road, America’s very first road that connected the West to the East, from Maryland to Illinois.

Still, the national road did not serve as efficiently as had been expected, and people wanted another mode of transportation to the West to be made. Consequently, in 1817, the New York legislature agreed to construct a canal that connected the Hudson River in New York to Lake Erie, known as the Erie Canal (Schultz, 2017). With the help of Irish immigrants, the canal was completed in 1825, and the construction proved very effective and useful to the movement of goods and people along the regions the canal passed through. The canal’s success inspired the construction of the Ohio, Chesapeake, and Pennsylvania canals, which the state refused to fund, but Dutch and British investors offered to fund the projects (Schultz, 2017). With the construction of these canals, the steamboats increased and made transportation even more effective, efficient, and convenient. The canal transportation system was the primary transportation mode in the first half of the 19th century.

Identify three major industries (not including the railroad) of America’s Industrial Revolution after the Civil War. What made the men who controlled them so successful? (150-200 words)

Some of the most significant industries that thrived during America’s Industrial Revolution were steel manufacturing, electrical companies, and petroleum refining. Andrew Carnegie was the owner of the biggest steel manufacturing company in America back in the late 19th century and early 20th century (Derbyshire 2009). Carnegie was a Scottish immigrant who built his started his company by replacing wooden bridges with iron bridges because the wooden bridges kept burning up. Later on, large-scale steel manufacturing was made possible by the Bessermet converter, and Carnegie built factories to produce steel. Carnegie used a few strategies to dominate the steel manufacturing industry. One of them was sabotaging the rival companies by spreading rumors that the rival companies were not safe. In addition, Carnegie overworked his employees for long hours with little pay and did little to provide safe working conditions. When the workers went formed a union and decided to strike, Carnegie hired immigrants who were more than willing to work under the bad conditions. This, however, caused a fight that is popularly known as the Homestead Strike, and eventually, the workers eventually decided to go back to work in the same conditions. This way, Carnegie was able to maximize his profits and eventually become the richest man in the world at the time.

The second industry was electrical companies. George Westinghouse was the first person to supply electricity that used alternating current (AC) as opposed to direct current (DC) (Derbyshire, 2009). Thomas Edison was the inventor of DC, and after betraying his employee Nikola Tesla, the latter ventured to invent electricity that overcame the challenges of DC. Westinghouse saw the potential of AC power and decided to buy the AC patents from Tesla, and with his prowess in invention technology, he went ahead to build one of the most successful electricity companies at the time. Lastly, the Standard Oil Company, started by John D. Rockefeller, dominated the petroleum refining business (Derbyshire, 2009). Like all the companies mentioned above, Rockefeller used different strategies to ensure he had a monopoly in the industry, like buying out all the other refineries and forming one large company.

Explain the importance of the transcontinental railroad. In what ways did the transcontinental railroad change America? (100-200 words)

One of the ways that the transcontinental railroad changed America was by allowing the easy and fast movement of people across the continent. Previously, such a movement was not only risky because of the American desert, taking months to circumvent, but it was also very expensive; the railroad solved these challenges (Renehan, 2007). Secondly, the railroad revolutionized the economy through the fast and efficient transportation of goods, not only domestically but also internationally. The railroad made it possible for Americans to trade in perishable goods, and the cost was also cheaper. Thirdly, the railroad also played a significant role in the Civil War by providing fresh supplies and transporting more soldiers, horses, and weapons, among other necessities used in the war.

Explain the origins and growth of early labor unions in the United States. In what way did they change America? (150-200 words)

Labor unions in America can be traced back to the 18th century when the journeymen tailors protested a wage reduction and, later on, the formation of the Federal Society of Journeymen Cordwainers in 1794. Consequently, more and more labor unions were later formed, especially during the era of industrialization. The unions were, however, segregated according to race, for example, black people, Irish immigrants, white people, and Italian immigrants (Skurzynski, 2008). This is because white people were highly paid, while the other races mostly produced unskilled and cheap labor. However, after a few years, the unions started to incorporate different races.

Furthermore, most of the unions were established to help employees protest against low wages, being overworked, and unsafe working conditions. However, the role of unions soon evolved into legislation. Some of these legislations include the creation of the Department of Labor, the Clayton Antitrust Act in 1914, the Walsh-Healey Public Contracts Act (PCA) of 1936, and lastly, the Fair Labor Standard Act of 1938 (Skurzynski, 2008).


Derbyshire, W. (2009). Six Tycoons: The lives of John Jacob Astor, Cornelius Vanderbilt, Andrew Carnegie, John D. Rockefeller, Henry Ford, and Joseph P. Kennedy. Spiramus Press Ltd.

Renehan, E. (2007). The Transcontinental Railroad: The Gateway to the West. Infobase Publishing.

Schultz, K. M. (2017). Hist. Cengage Learning.

Skurzynski, G. (2008). Sweat and Blood: A History of US Labor Unions. Twenty-First Century Books.


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The Development of the American Economy

The Development of the American Economy

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