The 1910s Business and the Economy: Overview

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The 1910s Business and the Economy: Overview

The United States entered the 1910s as a country with a relatively undeveloped economy that operated in isolation from foreign interests. The inauguration of Woodrow Wilson as U.S. president in 1913, and with innovations from an up-and-coming new breed of bankers and businessmen, this ten-year-period would bring awesome changes to the U.S. economy. Particularly with its entry into World War I (1914–18), the United States proved to the nations of the world that it had become a modern industrial power. Because the growth of the economy resulted in jarring changes to the structure of business and the labor force, government legislation and labor reforms were sought to safeguard the lifestyles of middle-class and working-class Americans.

At the start of the decade, many American workers remained on farms or were employed in small stores, factories, or mills. As the decade advanced, workers moved into big cities to take higher paying jobs in large industrial plants. With the rise of modern factory and assembly line techniques, jobs became more dependent upon machinery and many in the work force became drudges in monotonous, unskilled labor. The American labor force became dehumanized as modern technology experts analyzed the science of worker efficiency. The difficulty of the workers' condition within the modern factory system and the desire for better wages and improved work conditions led to a significant rise in membership in labor unions and an increase in strikes and other labor actions. Immigrant workers struggled for rights as they sought to build quality lifestyles for themselves and their families. Women, too, were becoming more aware of their rights in the workplace.

One reason for the increase in manufacturing jobs was the public's expanded taste for consumer goods. What had once been a conservative-spending public that relied on farming, general stores, and small groceries for food and goods was becoming a nation of enthusiastic consumers. Shopping once had been a necessary part of the weekly routine; now it was becoming a form of recreation. Retailers (those who sell products directly to the public) developed modern techniques for displaying and selling goods, and the advertising industry grew alongside the huge retail business.

President Wilson set about to enact a reform program called "The New Freedom." He hoped to open the U.S. economy to global interests and eliminate corporate trusts (combinations of companies run by a powerful few that discouraged competition in the marketplace). Wilson's administration intended to use the power of the federal government to ensure the American people that the American way of life would continue in the face of so many changes brought about by modern big business. Rather than alienating the heads of modern corporations, Wilson asked for their advice in drawing up legislation. By doing so, he had to make many compromises in writing laws, but he gained the cooperation of the biggest economic powers in the nation. This new relationship between government and big business proved to be a blueprint for twentieth-century U.S. economics.

The enactment of new tariff legislation (laws regarding the taxes placed on imported or exported goods), banking reforms, and an income tax were a few of the ways that the administration furthered the development of the United States as an economic power while protecting the American ideal of democracy.

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The 1910s Business and the Economy: Overview