Class 1, Oct 27: 1900-14: Progressivism & Imperialism

Class 1, Oct 27: 1900-14: Progressivism & Imperialism

1. 1900 marked a major turning point - from Gilded Age unbridled capitalism and isolationism to Progressivism and imperialism

2. Government expanded and curbed monopolies

3. Closing of frontier - continent connected and more unified

4. U.S. richest most democratic nation – but major problems of inequality

The Creation of the American

Century: 1900-50

Joe [email protected]

Coffeynotes.com

Despite being richest country, conditions humble compared to present

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Class TopicsI. (Oct 27) 1900-1914: Beginning of Progressive Era and

imperialism and end of Gilded Age and isolationism, Model T Ford and electricity, income tax and regulation of monopoly

II. (Nov 3) 1914-1929: Begins with WW I followed by Roaring 20s, prohibition, women’s suffrage and then return to isolationism and decline of British Empire

III. (Nov 10) 1929-1941: Great Depression, continued isolationism, low-key conservative presidents succeeded by FDR’s New Deal and rise of Fascism

IV. (Nov 17)1941-1950: Japan attacks Pearl Harbor, WW II and American Century begin, UN and Post-war boom, ending in Cold and Korean Wars, U.S. leader of free world

2

Why 1900-50? Created the American Century

◼ In 1900-50, our parents & grandparents utilized resources of bountiful continent, security of flanking oceans & friendly neighbors, institutions of democracy & capitalism to create world’s greatest nation

◼ While this unprecedented achievement was marred by slavery, inequality, and imperialism, it nevertheless contributed to peace and prosperity of the world 3

[O]ne of the truths about history …is that nothing ever had to happen the way it happened. History could have gone off in any number of different directions …. One thing leads to another. Nothing happens in a vacuum . Actions have consequences. - David McCullough, The American Spirit, 2017

During 1900-50, America moved from periphery to center of world

4

YearGDP

(bil$)

% of

UK

% of

World1800 13 42% 1%

1850 86 73% 5%

1900 614 196% 18%

1950 2,321 419% 25%

U.S. Eclipsed UK to top

world at 25%

American Century began around 1914 with WW I and firmly established by end WW II

Yet despite progress, mustn’t ignore problems

5

0%

10%

20%

30%

40%

50%

60%

70%

80%

1774 1800 1850 1860 1870 1910 1930 1940 1950 2010

Black/white ratios of labor earnings per worker (%)

Source: Peter H Lindert and Jeffrey G. Williamson, Unequal Gains, 2016, pages 190, 226,

Blacks earned less than 50% of whites

Women earned less than 50% of males

Millions of blacks lynched-even special trains to

attend lynchings

Native Americans devastated by disease, wars, lands and

forced onto reservations

How do we make sense of and understand U.S. development?

My Framework: Dynamics that created the American Century

6

American

Century

1) Resources: (inclusive capital):

Human, Man made, & Natural

2) Productivity:

Science, education, technology (creative

destruction)

3) Institutions:

Democracy, Capitalism, Government

4) Foreign Interactions: Investment, Trade, Aid, Immigration,

WARS

4 major contributors: Abundant resources, increased productivity, democratic institutions, and net gains

from foreign interactions

1)=Resources, 2)=Productivity, 3)=Institutions, 4)=Foreign

1890-1914: Timeline of Progressivism & Imperialism

1)1890: Closing of frontier, U.S. becomes world’s richest economy

3)1896: William Jennings Bryan “Cross of Gold “speech

2)1896: Delaware corporate law with limited liability

4)1898: Spanish-American War (control of Puerto Rico, Guam, Philippines, Cuba, Hawaii)

4)1900: Helps open China & put down Boxer Rebellion in China

3)1901: McKinley assassinated, Theodore Roosevelt becomes President

4)1903: U.S. acquires Panama Canal Zone

2) 1903: Wright brothers first flight

3)1907: Economic Panic of 1907

4)1907-9: "Great White Fleet" circles globe to show U.S. naval power

2)1908: Ford Model T hits market

3)1910-12: Mild but lengthy recession and deflation

3)1911: Supreme Court breaks up Standard Oil

3)1912: Woodrow Wilson elected president

3)1913-4: Depression (26% decline), Federal Reserve Act

3)1913: 16th Amendment, establishing an income tax

2) 1913: Henry Ford develops assembly line

71)=Resources, 2)=Productivity, 3)=Institutions, 4)=Foreign

What in America preceded 1900? Gilded Age - 1870s to about 1900

◼ Era of rapid growth and flood of European immigration

◼ Industrialization - railroads, factory system, banking …

◼ Two major depressions—Panic of 1873 and of 1893 -interrupted growth and caused upheavals

◼ Post Civil War South, remained devastated, depressed and continued white supremacy

◼ With burgeoning cities, political machines ruled urban politics and powerful monopolies reigned

◼ Closure of frontier provoked rethinking of Manifest Destiny and isolationism

8

What was world in 1914? British Empire & European Colonization

◼ “Long 19th century (1789 -1914) French Revolution to WW I

◼ British Empire dominant 37% world GDP; Europeans had colonized much of world, but U.S. GDP 2nd

9

Country ShareBritish

Empire 37%

US 19%

UK 17%

China 9%

USSR 9%

Germany 7%

France 4%

Italy 3%

Japan 3%

World Share

GDP 1913-

Mixed bag of Presidential leadership

◼ After Lincoln, succession of passive mediocre Presidents

◼ Then, at turn of century,active Progressives Teddy Roosevelt & Woodrow Wilson

◼ Followed by “normalcy”

◼ Franklin Roosevelt lauded for role in Great Depression & WW II

◼ Truman’s unexpected success after FDR

10

Party

Rank

of 44

Abraham Lincoln Republican 1

Andrew Johnson National Union 43

Ulysses S. Grant Republican 20

Rutherford B. Hayes Republican 33

James A. Garfield Republican 27

Chester A. Arthur Republican 30

Grover Cleveland Democratic 25

Benjamin Harrison Republican 32

Grover Cleveland Democratic 25

William McKinley Republican 14

Theodore Roosevelt Republican 4

William Howard Taft Republican 23

Woodrow Wilson Democratic 13

Warren G. Harding Republican 37

Calvin Coolidge Republican 24

Herbert Hoover Republican 36

Franklin D. Roosevelt Democratic 3

Harry S. Truman Democratic 6

Source: Wikipedia

a. ^ Quartiles were determined by splitting the data into an upper and lower half and then splitting these into the first two and last two quartiles, respectively. When splitting an odd number of values, the median was included in the upper half.

C-Span 2021 Ranking of U.S.

Presidents

Gilded Age small government & unbridled

capitalism

◼ Unprecedented growth of American economy after the Civil War, with little interference from Washington

◼ Prevailing wisdom was that all you needed to create a good society was a sound currency and Bill of Rights -free market could do the rest

◼ Washington was a sleepy capital and there was no central bank or income tax

◼ Government collected only 8 cents for every dollar of GDP and 6 of 8 cents spent locally

◼ Government overshadowed by giant corporations

11

Source: Alan Greenspan and Adrian Wooldridge, Capitalism In America, 2018

Manifest Destiny, cheap land and gold impelled settlers to Wild West

12

American Progress (1872) by John Gast, Bringing light & trains from East to darkened

West

▪ Belief in American exceptionalism drove mission to redeem and remake West in image of East

• Aided by expansion of railways, telegraph, & homesteads • And, driving Native Americans and bison into obscurity

Frontier closure in 1890 shifted

attention abroad

◼ Historian Fredrick Jackson Turner argued that frontier established liberty by releasing from European mindsets - no need for landed gentry; free frontier land was safety valve

◼ Thus, closure significant so needed carry exceptionalism abroad

13

Corporate monopolies dominated in Gilded Age

◼ By 1881, Standard Oil controlled 90% of refining

◼ U.S. Steel had capitalization triple federal budget

◼ General Electric, Westinghouse, American Sugar, Swift, Goodyear, American Tobacco, Eastman Kodak, International Harvester, and Singer all monopolies

◼ Bankers became all powerful- J.P. Morgan bailed out U.S. government twice

◼ 1898 Sherman Antitrust Act had limited effectiveness

◼ Bad working conditions & labor strife14

Source: Thomas C. Reeves, Twentieth-Century America –A Brief History, 2000

Progressive William Jennings Bryan (1860-1925)

protested Gilded Age and promoted Progressivism

◼ Championed lost causes

◼ Led Democrats to 3 defeats, opposed entrance into WW I, and prosecuted John Scopes in famous monkey trial

◼ Yet, ultimately, his proposals triumphed: federal income tax, popular election of senators, female suffrage, Department of Labor, railroad regulation, monetary reform, and abandonment of gold standard

◼ Greatest success - extended the realm of politics to include markets and government

15Source: Alan Greenspan and Adrian Wooldridge, Capitalism In America, 2018, page 150

Cross of Gold speech, 1896

Industrialization & Railroads were most significant

◼ Economic abundance, religion, patriotism and optimism were in evidence

◼ By 1880s, manufactures surpassed farm products-making U.S. world’s leading industrial nation

◼ Inventions and technological advances were at core of industrialization between 1860 and 1890

◼ Railroads stimulated industrialization - 1900 railroad network of 200,000 miles – most in world and approaching historic peak

16Source: Thomas C. Reeves, Twentieth-Century America –A Brief History, 2000

Late 1800’s transformation and Imperial ambitions

◼ Industrialization had transformed a settled America

◼ With closing of frontier, reformers argued, as a great nation, expanding overseas was necessary now

◼ Europe’s great powers were carving up Africa and extending colonies in Asia

◼ 1895 Japan’s defeat of China made it a new power

◼ 1899 Open Door policy toward China was to ensure that Americans had access to large Chinese market

Source: Charles A. Kupchan, Isolationism: A History of America's Efforts to Shield Itself from the World, Kindle Edition, 2021

1898: End of Isolationism and begin

of Imperialism

◼ In Farewell Address, George Washington warned against “entangling alliances”

◼ Spanish-American War 1898 began U.S. imperialism

◼ Justified for trade and repayment of debts, prevent Europe in Americas, and keeping order around the world

◼ U.S. acquired remaining island colonies of Spain

◼ U.S. policed and intervened in Latin America

◼ Imperialist foreign policy was controversial and domestic opposition allowed Cuban independence 18

Americans toasted the arrival of a new century

◼ Most Americans believed in progress of their predominately White Protestant country

◼ Per capita GDP highest in the world and population exceeded Great Britain, France, or Germany

◼ Inventions were improving living standards

◼ Immigrants were pouring in and population booming

◼ Wild West, free of Indian resistance, was more inviting

◼ But also rising complaints of monopolies, inequality, recurrent depressions, wretched working conditions, corruption, ravaging of natural resources …

19Source: Thomas C. Reeves, Twentieth-Century America –A Brief History, 2000, Chapter 1

New century (1900) was major turning

point to Progressivism

◼ Victory in Spanish-American war spurred Roosevelt’s international ambitions

◼ Modernized Navy – in 1906 2nd only to Great Britain

◼ After dubious dealings, signed Panama Canal treaty

◼ U.S. became a policeman of Western Hemisphere

◼ In 1907 sent the “Great White Fleet” around world to show-off American power


The panic of 1907 prompted Roosevelt’s

economic reforms

◼ Roosevelt blamed panic on unscrupulous financiers

◼ Panic was bailed out by J.P. Morgan

◼ Congress passed in 1908 monetary reform eventually led to creation of Federal Reserve System in 1913

◼ Roosevelt sponsored far-reaching progressive reforms: federal income and inheritance taxes, stricter railway regulation, and reduction of tariffs


Progressive Roosevelt succeeded by friend then

foe conservative Taft

◼ Republican Taft defeated Democrat William Jennings Bryan in 1908

◼ Taft agreed to high tariffs and snubbed Progressives

◼ Supported link between foreign policy and commercial interests - “dollar diplomacy”

◼ Roosevelt ran as Bull Moose, split Republican vote

◼ Democrat Wilson won & soon faced with WW I

◼ Historians speculate if Roosevelt would have been betterthan Wilson for WW I

22Source: Thomas C. Reeves, Twentieth-Century America –A Brief History, 2000, Chapter 3

1900-14: Progressivism & ImperialismSummary & Conclusions

◼ Early 20th century was of prosperity & transformation

◼ U.S. became world’s richest and largest economy

◼ Progressives began to address ills of Gilded Age of unbridled capitalism and corruption

◼ Closing of frontier shifted focus abroad - in Spanish-American War and imperialism

◼ Nascent technologies of electricity and internal combustion engine began to shape the nation

◼ But soon, U.S. would become embroiled in the Great War and then revel in the Roaring 20s

23Class II, Nov 3: 1914-1929: WW I, Roaring 20’s and Reordered World

1896–1908 (45 stars)

Major references & Recommended Books

◼ Frederick Lewis Allen, Only Yesterday, 1931 (Well-written account of Roaring 20s and major events such as the Great Depression, Prohibition, and the changing lifestyles during the early 1900s)

◼ H.W. Brands, Dreams of El Dorado – A History of American West, 2020 (Excellent history from 1803 Louisiana Purchase until Theodore Roosevelt, especially settling of the wild West and its eventual integration with the East)

◼ Alan Greenspan and Adrian Wooldridge, Capitalism in America, 2018 (co-authored by former Fed Chairman is story of the major drivers of U.S. economic advance over the past two centuries)

◼ Charles A Kupchan, Isolationism- A History of America’s Efforts to Shield Itself from the World, 2020 (Assessment of the rise of isolationism from American exceptionalism from colonial times to date)

◼ Jonathon Levy, Ages of American Capitalism – A History of the United States, 2021 (Detailed explanation (907 pages!) of evolution of capitalism in America)

◼ John Lukacs, A Short History of the Twentieth Century, (Concise history of world wars, its nations and nationalism, and society.)

◼ Thomas C. Reeves’s, Twentieth-Century America, A Brief History, 2000 (Succinct synthesis of 20th century U.S. history of major public policies and policymakers as well as the lives of people)

◼ Adam Tooze, The Deluge: The Great War, America and the Remaking of the Global Order, 1916-1931, 2014 (Analysis of the WW I and its anguished aftermath of how American

predominance was achieved afterwards but failed to keep the hard-won peace) 24

Appendix of Supplemental Information

Transition from agriculture and

rural to industry and

urban

25


U.S. had several Depressions

26

Date Length, depth and causes1807 1807-10 Depression - US embargo and UK and trade restrictions , commodity and securities prices fell

1836 1836-38 Depression( 33% decline) Bank failures, lack of confidence in currency, tightening of credit, crop failures

1838 1839-43 Depression (34% decline) Long and deep depression, deflation and defaults on debt

1865 1865-67 Depression (34% decline) After Civil War deflation during Reconstruction and international instability

18731873-79 Depression (34% decline) Longest contraction arising from economic problems in Europe prompting failure

of largest bank in US which burst the post-Civil War speculative bubble.

1882 1882-85 Depression (33% decline) Boom in railroad construction ended hurting iron and steel industries

1902 1902-04 Depression (16% decline) Came about a year after a 1901 stock crash

1910 1910-12 Depression (15% decline) Mild but lengthy recession and deflation

1913 1913-14 Depression (26% decline) Decline not ended until start of WW I, Federal Reserve Act signed

1929 1929-41 Great Depression (27% decline) Banking panic, high unemployment, stock market crash

2007 2007-07 Great Recession (Only 5% decline-Not depression) Mortgage crisis, bust of housing bubble, banks and autos

2020 (2020-??) Now unknown extent of decline sparked by Coronavirus global 2020 pandemic

U.S. Depressions (2 year real GDP decline of 10% +)

Source: List of recessions in the United States, Wikipedia.


Amendments to U.S. Constitution

27

Completed

13th Abolishes slavery, and involuntary servitude, except as punishment for a crime 12/6/1865 12/6/1865

14th Privileges or Immunities Clause of Due Process and Equal Protection 7/9/1868 7/9/1868

15th Prohibits the denial of the right to vote based on race, color or of servitude 2/3/1870 2/3/1870

16th Permits Congress to levy an income tax 2/3/1913

17th Direct election of United States senators by popular vote 4/8/1913

18th Prohibited manufacturing or sale of alcohol 1/16/1919

19th Prohibits the denial of the right to vote based on sex 8/18/1920

20th Changes dates begin of congress and presidential terms to January 3 and 20 1/23/1933

21st Repeals Prohibition but bans transport into dry states 12/5/1933

22nd Limits to 2 terms a person can be elected President 2/27/1951

1865-1947, 13 to 22nd Amendments to US Constitution


28

1809 1848 1900 1941 2018

U.S. U.S. U.S. U.S. 97 total

France Canada Canada

Switzerland Costa Rica UK

UK Ireland

Luxembourg Switzerland

France Sweden

Switzerland Australia

Spain New Zealand

Greece

Norway

New ZealandSouce: https://www.systemicpeace.org/inscrdata.html. Polity scores of are based

competitiveness and openness of elections, extent of political participation and checks

on executive authority. "Polity Score" of 6 to 10 is considered a democracy.

US earlist democracy -only 11 in 1900


Patterns of economic growth of the U.S.

◼ Shift from agriculture to services

◼ Shift from population to other sources of growth

29

Year

Agriculture,

forestry and

fishery

Industry Services

1870 50% 24% 26% 100%

1890 38% 24% 38% 100%

1913 28% 30% 43% 100%

1929 21% 29% 50% 100%

1938 18% 31% 51% 100%

1950 13% 34% 54% 100%

2003 2% 20% 78% 100%

Percent of employment in

Source: Angus Madison, Contours of the World Economy, page 384

Dates GDP PopulationGDP per

capitaLand area

Non-

residential

capital

stock

Total factor

productivity

Population

share of

growth

1820-1870 4.2% 2.8% 1.3% 1.4% 5.5% -1.5% 67% 0.0%

1870-1913 3.9% 2.1% 1.8% 0.1% 5.5% 3.6% 53% 0.0%

1913-1950 2.8% 1.2% 1.6% 0.1% 2.0% 1.6% 43% 0.0%

1950-1973 3.9% 1.5% 2.5% 0.0% 3.3% 1.8% 37% 0.0%

1973-2003 2.9% 1.1% 2.0% 0.0% 3.3% 0.9% 36% -0.1%

1820-2003 3.6% 1.9% 1.7% 0.4% 4.1% 0.7% 51% 0.0%

Sources of economic growth in the United States (Average annual compound growth rates)

Source: Angus Madison, Contours of the World Economy, page 386


30

Dates Name Party

2021 Rank

of 45

Most

frequent

quartile

1897-1901 William McKinley Republican 14 2nd 14

1901-1909 Theodore Roosevelt Republican 4 1st 4

1909-1913 William Howard Taft Republican 23 2nd 23

1913-1921 Woodrow Wilson Democratic 13 1st 13

1921-1923 Warren G. Harding Republican 37 4th 37

1923-1929 Calvin Coolidge Republican 24 3rd 24

1929-1933 Herbert Hoover Republican 36 3rd 36

1933-1945 Franklin D. Roosevelt Democratic 3 1st 3

1945-1953 Harry S. Truman Democratic 6 1st 6

U.S. Presidents 1900-1950 and their 2021

rankings by experts since 1948

Sources: "Presidential Historians Survey 2021". C-SPAN and Historical rankings of presidents of

the United States, Wikipedia. Surveys were distributed to historians, professors and other

professional observers of the presidency. 142 did survey.


Major contribution of immigration during

1900-50

◼ U.S. is a nation of immigrants.

◼ Immigration policies have been in effect since 1794

◼ U.S. receives the vast majority of world’s immigrants

◼ Immigration has been a major share of population growth

◼ U.S. population growth declined from 1.9% 1900-14 to only 0.8% 1929-41 as did immigration share of growth

◼ Immigration is selective - have higher percent of work force participation, entrepreneurialism and higher education than average of home country – hence “brain drain” 31

Years

Population

growth/yr

Immigration

% Growth

1900-1914 1.9% 58% 13377089

1914-1929 1.4% 30% 6686669

1929-1941 0.8% 10% 1101585

1941-1950 1.4% 5%

1950-2019 1.1% 27% 47541947

Immigration share of

population growth


Performance of U.S. Economy

32

YearGDP/Capita

$

Population

(millions)GDP ($ bil) GDP/Capita Population GDP

GDP/Capita

$

1900 8,038 76 614 388% 4.6% 18.0% 2,072

1914 9,096 100 905 337% 5.5% 18.7% 2,700

1929 11,954 122 1,461 340% 6.2% 21.2% 3,516

1941 13,553 134 1,815 399% 5.8% 23.0% 3,400

1950 15,240 152 2,321 416% 6.0% 25.1% 3,664

2000 44,727 282 12,620 547% 4.6% 25.2% 8,177

2020 53,749 329 17,709 509% 4.2% 21.6% 10,565

1910-1914 0.9% 1.9% 2.8% 47% 318% 112% 1.9%

1914-1929 1.8% 1.4% 3.2% 103% 235% 137% 1.8%

1929-1941 1.1% 0.8% 1.8% -377% 53% 159% -0.3%

1941-1950 1.3% 1.4% 2.8% 157% 154% 156% 0.8%

1900-1950 1.3% 1.4% 2.7% 112% 163% 134% 1.1%

1950-2000 2.2% 1.2% 3.4% 134% 70% 100% 1.6%

2000-2020 0.9% 0.8% 1.7% 72% 65% 68% 1.3%

U.S. GDP and population 1900-2020 (constant 2011 US$)

Source: Maddison Project Database (MPD) 2020 updated by World Bank indicators, Aug 19, 2021. Some

missing data have been interpolated from other sources.

Growth US world share during period

US World US % World

Annual growth during period


◼ China in 1820, 1850, & 1870, thanks to large population and despite low GDP/capita, had largest GDP of major powers

◼ U.S. in 1820, has smallest population and GDP of major powers

◼ In 1913, U.S. had the largest GDP and in 1950, 1990, but was slightly below China by 2018

◼ USSR in 1950 had greater GDP than all other powers but U.S.

33

Year China Germany France UK India Italy JapanUSSR/

RussiaUSA

1820 336 39 57 70 196 54 41 55 27 0

1850 353 77 93 118 223 64 46 69 86 0

1870 338 115 115 183 215 79 54 105 193 0

1913 431 378 230 375 326 151 126 210 987 0

1950 437 423 351 554 354 263 257 707 2,321 0

1990 3,385 2,016 1,636 1,506 1,751 1,475 3,700 2,227 9,250 3

2018 18,152 3,886 2,582 2,540 8,836 2,077 4,867 3,613 18,141 18

GDP of Major Powers 1820 to 2018 (2011 Int $ bil.)

Source: Maddison Project database, downloaded Mar 2021

Appendix – Background Info

Government spending soared from 10% to 40% GDP

34

Below 10%

WW I

WW IIGreat

Depression

Now 40%


Role of Capitalism

◼ Capital: “the process through which a legal asset is invested with pecuniary value, in light of its capacity to yield a future pecuniary profit

◼ Not an inert item – but is inclusive that includes considered broadly human, man made and natural resources

◼ Ism: a distinctive doctrine, cause, or theory

◼ Capitalism: an economic system based on private ownership and their operation for profit and includes competitive markets, a price system, voluntary exchange and wage labor

◼ Capitalists: Owners or decision-makers of capital who determine investments

35Jonathon Levy, Ages of American Capitalism – A History of the United States, 2021, Introduction


Explanation of 4 major contributors to the American Century

◼ Resources: The economy’s stock of (i) manufactured capital (roads, buildings, machines, equipment), (ii) human capital (knowledge, aptitude, education, skills), and (iii) natural capital (forests, agricultural land, rivers and estuaries, ecosystems, and subsoil resources).

◼ Productivity: The increase in output per hour of labor due to discovery and use new and improved technologies. Creative destruction, the principal driving force of economic progress, involves displacing previously productive assets and their associated jobs with newer technologies and their jobs.

◼ Institutions: Democratic economic institutions enforce property rights, create a level playing field, and encourage investments. They are supported by, and support, political institutions which distribute political power widely but achieve sufficient political centralization to establish law and order to secure property rights and a market economy. Democratic institutions unleash, empower and protect each citizen to innovate, invest and develop. Democracy is best because it fosters innovation and prosperity and requires both a strong state and a strong society. The state must be strong enough to enforce laws and provide public services but also restrained by a well-organized civil society.

◼ Foreign interactions: U.S. was founded by immigrants and supported by foreign trade and investment. During WW I & II, the large U.S. economy supported the military and political power to establish U.S. as the leading country. Trade and investment supported economic growth and mutually beneficial relations with other countries.

36


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Class 1, Oct 27: 1900-14: Progressivism & Imperialism