Last updated: July 28, 2019
Topic: AutomotiveCars
Sample donated:

How important was the railroad network in the expansion of american economy in 1890-1910!

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In period of 1890-1910, America was in the ‘‘Gilded Age’’ . It was an era for rapid economic growth especially in the North and West where million of immigrants from Europe came to America . It was the period of industrialisation when America become the world’s most dominant economic. The average annual income rises for non-farm workers by 75% during this period of history. There were no longer slavery which mean there is equal opportunity to become rich in the world best capitalist country, America. !

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Railroad were the biggest industry at that time. This is due to the improvement in technology such as the development if steel and iron. In addition, there were plenty of labour who came from Europe and China. This made the expansion of railway happen rapidly. !

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During this period, the railroad has expand to west. It open up remote areas to create town and cities. This gives people the opportunity to set up businesses to trade for goods such as selling crops or clothes. People do not need to travel far into the cities as urbanisation comes with the expansion of railroads. Big businesses set up their industries such as coal and mine industry. This gives employment to people. Increase income which increases the demand for goods that contribute to the improvement in the economy. !

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The expansion of rail roads would allow the transfer of raw material within the country. Such as California which is the largest oil production state in the west can transport oil to the east and other states via train. This allows each state to specialised in different types of production and bene?t from comparative advantage. Industries such as cars manufacturing would bene?t from this. As transport raw materials is much easier, they can produced more which lead to an increase in pro?t. People invest in stocks in the stock exchange and therefore, more money into the economy. !

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Not only that the expansion of rail roads lead to the increase of demand in goods but it also increase the demand in services. In 1900 there was a boom in hospitality industry as people can travel for leisure and stay for 1-2 nights. Hotel became popular amongst people in America and the development in tour agents. More pubs and restaurants were open than before. This lead to an increase in tourism industry. Development of infrastructure and tourists attractions. !

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The government in America is a ‘weak government’. There is not that much restriction as they wanted people to be independent and let businesses run the economy. Andrew Carnegie was a successful businessman who controlled the iron and steel production. He owned and control most of railroad network. This support the economy as he was the role model of adopting new technology. Many businesses soon, start to adopt his idea which also lead to the concept of mass production (the use of technology).!

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On the other hand, not everyone bene?t from the railroad network. Such as the farmers. The number of farms has increase rapidly due to the expansion of new roads. However, they were over supply which lead to a decrease in price. The demand for crops has fall as people were more interest in buying goods. Farmers did not get a lot of money and they have to work long hours in order
to produce more and sell more. !

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Furthermore, the railroad network lead to an increase in population. This may bene?t industrial to have more labours. However, the downside is that there will not be enough space for everyone. Resources need to be shared; more food, more land and competition in ?nding jobs. This lead to scarcity of resources which contribute to economic problems in the long term. !

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The railroad was not the only factor that brought an improvement to the economy. It was the government policy of Laize Faire. A doctrine opposing government interference in the economy except to maintain law and order. This allows business to set up easily as there is no restrictions and trade barriers. This also create free market without the government planning the economy.!

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In conclusion, the expansion of railroads bought many new opportunities. Business can trade easier and it allows urbanisation to take place which improve the living quality. Industrial revolution has enable the economy to grow as it gives employment to people and also produces goods that will make people spend money on. However, there were other factors as well which contribute to the expansion of the economy such the government’s policy of Laize Faire.