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Economic factors of the american revolution
Economic factors of the american revolution
Economic factors of the american revolution
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The economic elements of post-revolutionary America proved to be quarrelsome. The economic issues tended to be mostly between debtors and creditors, resulting from the lack of specie, silver, and gold currency. “Stay laws” and “Tender laws” were created to help farmers recover from debt, by allowing them to pay with goods rather than hard currency, and protected their farms from foreclosure. Merchants, clearly, generally opposed these policies. The spokesmen of the debtors suggested that the government had an obligation to use paper money to ease the currency shortage, but by increasing the money supply inflation was encouraged as well. As long as the government didn’t flood the market with paper currency, ultimately decreasing the value, debtors
Document D presents the issue of the national bank, which was a hotly contested issue for most of the nation’s history. The decision to force states to allow the national bank reiterated the issue of state powers versus federal powers. This issue showed clear divisions between the northern states, who were more supportive of federal powers, and the southern states, who were more in favor of states rights. The financial decisions made in the Era of Good Feelings were often perceived as benefitting the southern states more than the northern states, causing separatism. Document A presents the issues of the Tariff of 1816. As demonstrated in the document, the southerners felt unfairly taxed, and did not feel as if they were getting anything out of the taxation. This type of disagreement about tariffs would continue, eventually leading to greater separatism and division. For these reasons, the title “The Era of Good Feelings” inaccuratly sums up the economic occurrences after the war of
He states that the financial system was based on competing state banks with no central bank which promoted a rapid economic growth. As the American banking system developed the money supply developed with it. The federal government began the banking system through the issuing of specie but as the capitalist system developed the banking structure developed as well. During the Civil War, the North printed Greenbacks that drove gold from the domestic circulation to help pay for war necessities. The Greenbacks, however, were rarely used in the South expressing the different economies of the North and the South at the time of the Civil War. With differing economies and the growth of specie and paper money, Brands argues that the basis of knowledge about the money system of this time lays a foundation for how Carnegie, Rockefeller, and others were able to manipulate the market and gain wealth. Leading into price manipulation by those in corporate
At the time of the convention, farmers were the debtor class and were prone to revolt. Farmers, who lived all across the United States, sought debt relief and tax relief (Beard, 28). The weight of the debt at the time was crushing small American farmers who were being forced to pay their debts by selling their property for less than its value (Holton, 90). These debtors sought relief in many legal forms. For example, they asked for the “abolition of imprisonment, paper money, laws delaying the collection of debts, propositions requiring debtors to accept land in lieu of specie at a valuation fixed by a board of arbitration” (Beard, 28). However, they also sought relief through revolt (ex. Shays’ Rebellion) (Beard 28). Their desires contrast those of the creditors, stockholders, manufacturers, and shippers of their time (Beard, 29).
As the new century approached, a national crisis began to develop in the United States. The nation faced a severe depression, nationwide labor unrest and violence, and the government’s inability to fix any of the occurring problems. The Panic of 1893 ravaged the nation and became the worse economic crisis of its time. The depression’s ruthlessness contributed to social unrest and weakened the monetary system’s strength, leading to a debate over what would be the foundation of the national currency. As the era ended, the US sought to increase its power and strength.
In the beginning of the 1830s, the United States experienced a short period of expansion and a prosperous economy. Land sales, new taxes, such as the Tariff of 1833, and the newly constructed railroads brought a lot of money into the government’s possession; never before in the history of the country had the government experienced a surplus in its national bank. By 1835, the government was able to accumulate enough money to pay off its national debt. Much of the country was happy with this newly accumulated wealth, but President Jackson, before leaving office in 1836, issued what is called a Specie Circular. Many local and state governments liked to save specie, or gold and silver, and use paper money to take care of transactions. President Jackson, in his Specie Circular, said that the Treasury was no longer allowed to accept paper money as payment for the sales of land and the like. Most, if not all, of the country did not like this, and as a result many banks restricted credit and discontinued the loans. The effects of Jackson’s Specie Circular took effect in 1837, when Martin van Buren became president. All investors became scared, and in 1837, attempted to withdraw all of their money at once. Soon after this, unemployment and riots occurred in many cities, and the continued expansion of the railroad ceased to be.
In fact, a notable expert on the Confederacy revealed that “the single greatest weakness of the Confederate government, he thought, was in the mishandling of finances” (Eaton 196). Due to the excessive amount of time Davis spent in military affairs, the reigns of the Confederate economy remained in the hands of the Secretary of the Treasury, Christopher Memminger. As the war raged on, the economy of the South declined because Memminger was forced to issue paper money to maintain the ailing Confederate army because the states failed to collect effective taxes and tariffs during wartime (197). Excessive amounts of paper money flooded the economy with no gold backing by government reserves which led to massive inflation and a low valued currency. Davis’s failure to react in a timely manner to the declining economy led to the desperate by Congress measure which “enacted law taxing all property, real and personal (slaves), 5 percent, and jewelry and articles of luxury ten percent” but only raised “about one per cent income in taxes” (200). The discrepancy between the large increase and taxes and the minimal increase in income created insurmountable inflation in the economy. Although Memminger and Congress were responsible for fixing the faltering economy, Davis failed to effectively oversee his Secretary of Treasury to ensure the economic state of the
The American Revolution (1775-1783) was a war between England and the colonies which were settled earlier by the English. There were many factors and events that led to the American Revolution. The Revolution was mainly an economic rebellion that was fueled by taxation without representation following the French and Indian War. The English Parliament was more often than not considered cruel and unfair by the colonists. With conflicts over trade, taxes and government representation, the colonies were at a starting line of a revolution that would later transform into the basis of the United States of America.
If "taxation without representation" could rally the colonists against the British Crown in 1776, tight money and ruinous interest rates might be cause for populist revolt in our own day. Federal Reserve monetary policy also has severe social burdens, measured by huge changes in aggregate output, income, and employment.
Paper money that was issued by the colonial government was a concern. Certain paper money could only be used for paying public debts, including military supplies or taxe...
Revolutions are usually described as “radical” events. A “radical” event is defined as one that greatly changes the political, cultural, social, and/or economic nature of a society. I believe that the American Revolution was a radical event that dramatically changed our society. There were many impacts to the changes such as slavery, primogeniture, the Articles of Confederation, republican motherhood, and government. This was the time in life, that we as America gained our independence from Britain. The American Revolution is what shaped our world to become what it is today.
Friedman, Milton and Jacobson Schwartz, Anna. A Monetary History of the United States, 1867-1960. Princeton, 1963
The American Revolution marked the divorce of the British Empire and its one of the most valued colonies. Behind the independence that America had fought so hard for, there emerged a diverging society that was eager to embrace new doctrines. The ideals in the revolution that motivated the people to fight for freedom continued to influence American society well beyond the colonial period. For example, the ideas borrowed from John Locke about the natural rights of man was extended in an unsuccessful effort to include women and slaves. The creation of state governments and the search for a national government were the first steps that Americans took to experiment with their own system. Expansion, postwar depression as well as the new distribution of land were all evidence that pointed to the gradual maturing of the economic system. Although America was fast on its way to becoming a strong and powerful nation, the underlying issues brought about by the Revolution remained an important part in the social, political and economical developments that in some instances contradicted revolutionary principles in the period from 1775-1800.
In addition to the powerful coordination the Bank possessed, it influenced interest rates for loans to the working class and the rate of inflation in the nation. Because of the use of various bank notes, variegating from bank to bank due to the lack of national currency and mixture of specie, people trusted that each bank would be able to “cash in” their bank note for specie. This did not always hold true, but the Second Bank of the United States was the most trusted of the banks to supply specie in exchange for their bank notes. Because of this most people, in order to protect themselves from losing money, would exchange state bank notes for notes issued by the Second Bank. However, this meant that the Second Bank could threaten the state banks by demanding more gold, which might cause for their bankruptcy. As a result, the state banks were pressured into not being able to over issue their bank notes, which inevitably decreased their importance and power in the nation by decreasing the circulation of their bank notes. This was the greatest argument posed by the leaders of the state banks against the Second Bank of the United States (Roughshod 2).
Paper money is more complex. From 1900 through 1971 (with the exception of during World War I), the US dollar was backed by gold, meaning its value was legally defined by a certain weight of the metal. That ended in 1971, when Richard Nixon shocked the world by breaking the link to gold and allowing the dollar’s value to be determined by trading in the foreign exchange markets. The dollar is valuable not because it’s as good as gold, but because you can buy goods and services produced in the United States with it—and, crucially, it’s the only form the US government will accept for tax payments. Among the Federal Reserve’s many functions is allowing the issuance of just the right quantity of dollars—enough to keep the wheels of commerce well greased without slipping into a hyperinflationary crisis.
George, Rosemary Marangoly, and Helen Scott. "An Interview with Tsitsi Dangarembga." Novel (Spring 1993):309-319. [This interview was conducted at the African Writers Festival, Brown Univ., Nov. 1991]