The American economy grew in the years 1890-1914 because after the Civil War America hit an industrial revolution due the rise of big business. America was rich in natural resources that were now there and ready to be used as and when they were needed. These new industrial companies such as, John D. Rockerfeller’s Standard Oil Company and Bethlehem Steel needed to use the railroad and shipping services. This generated a lot of extra money for the economy. Acts such as the Interstate Commerce Act of 1885 tried to make pricing fairer for the smaller businesses but failed in the fact that the railroads could charge any price as long as they published their tariffs, which made no difference to the big businesses with more money.
During the industrial revolution the two industries that prospered the most were the industries of steel and iron. By 1900 iron production rose from 920,000 tons to 10.3 million tons and by 1919 the USA produced two-thirds of the world’s oil. This was all down to work of big businesses, and it was a massive boost for the American economy, it also helped to introduce America to foreign trade. As these natural recourses actually came from America tariffs could be raised without having to raise the costs of the raw materials themselves as would be the case with countries that would have to import the raw materials.
As theses raw materials such as steel and iron were being extracted more and more frequently they needed to be transported from places such as Texas and Pennsylvania to the big cities. This then led to the expansion of the railroads. In 1860 the mileage of railroad was 30, 000 miles and by 1900 it was a massive 190,000miles. This became a huge national market that meant mass production could take place and that everything including the raw materials could be transported across the country. This leads into the idea of new technology. The invention of the refrigerated ship meant that foreign trade could go even further with the transportation of meat for both domestic purposes and abroad.
Another major factor as to how far the growth of the American economy in the years 1890-1940 was due to the rise of big business was settlement in the West. The last of the problems with the American Indians was resolved in 1890 at the Battle of Wounded Knee Creek and the American Indians had been confined to reservations, signalling the end of the old American frontier. This meant that the Great Plains were finally open for cultivation and the possible farming of many good crops. Perhaps as with the other raw materials, iron and steel, this created another big and new industry of farming therefore showing how big business helped the American economy to grow yet again the years 1890-1914.
I think another big factor is individuals and vertical integration. Powerful individuals such as Henry Ford had the ability to link their creation to their business in a way that meant they controlled not only the making of their invention but also all the processes of getting their product on the market. This meant that over time big businesses got even bigger and they pumped more money into the economy.
Overall I believe that big business played a massive part in the growth of the American economy in the years 1890-1914, and I believe that immigration was the main factor that helped the big businesses to help the economy. Without the immigrants cheap labour would not have been possible and therefore the amount of work done in those years perhaps would not have been done so quickly and definitely not done as cheaply.