Economic growth and the need for trade in the late nineteenth century
By the end of the 19th century, the USA had experienced economic growth and it was clear to business men that to further growth, the US would need to expand internationally to seek trade with overseas nations.
What growth had the USA experienced by 1890?
In 1870, the US produced 50 million tonnes of coal. By 1890, this had increased to 262 million tonnes.
↳ The US was now producing more coal than their closest rival– Britain (219m tonnes).
Furthermore, in 1890, the US produced 13 million tons of steel, which increased from just 380,000 tonnes in 1875.
↳ The US was now producing more steel than their closest rival– Germany (6m tonnes).
By 1900, Andrew Carnegie's US Company was producing more steel than the whole of Britain, showing how much reserve of resources America had.
In 1890, the US produced 10.6 million bales of cotton.
↳ The US was now producing more cotton than their closest rival– India (3m bales).
Despite many economic advancements, the US economy continued to suffer because of an unstable banking system.
This is because too many small banks were giving out bad loans.
An example is where Jay Cooke's Railway company borrowed 100 million USD and declared bankruptcy, destroying hundreds of small banks, which led to a depression.
So they could maintain and maximise profit, it became clear that businessmen and commercial farmers needed overseas markets, as domestic markets were unreliable.
They campaigned for the government to reduce taxes on imported goods as they wished to import machinery. The higher taxes would increase their overall production costs.
The Democrats supported the idea of reducing tariffs, but Republicans wanted to preserve them as they protected local businessmen from international competition.