Explain Why the American Economy Expanded so Much and so Fast Between 1890 and 1920.

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Explain why the American economy expanded so much and so fast between 1890 and 1920.

Between 1890 and 1920, the American economy expanded hugely at an extremely fast pace. This growth saw, by 1900, people employed in manufacturing, mining, construction and services rise from 4 million to 18 million and the USA was producing 30% of the worlds’ manufactured goods. There were many factors that caused this growth such as the development of the railways, immigration, a large supply of natural resources, the idea of the ‘American Dream’ and monopolies.

One of the biggest factors of the rapid economic expansion was the development in transport and communication systems. The development of the railway provided links that allowed the creation of a national market and access to raw materials. Also, the building of the railroads was a stimulus to industrial development in itself. By 1890, the revenue from railroads was over $1,000 million; double that of the federal government, and the mileage had increased from 30,000 miles to over 190,000 between 1860 and 1900. This development of the railway was partly due to the mass immigration that came from Europe. The huge, sudden growth in population formed an unending supply if cheap, eager labour. Men were paid considerably small wages to complete tasks such as building the railways. Developments in communications such as the telegraph in 1944 and the telephone in 1876 were also very significant. This allowed large scale management to communicate effectively nationwide and meant that companies could establish operations all over the country with no communication problems. Industrial development, sales and purchases were also now much easier to deal with and wide scale marketing and advertising spread across the West.

Another important factor of the economic growth is the fact that America had an almost unlimited supply of useful natural resources such as coal, iron, lead, copper and timber. These great numbers of...
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