Involvement of America in the civil war plunged the country into huge public debt that was triggered by the need for funds to keep the war afloat. The debt persisted in the post war America to above $ 75 million and the country recorded a historical debt to GDP ratio on 30%. Since the enactment of the first tax law in the country by Lincoln’s administration, the debt kept rising to over $ 900 million. The country’s continuous involvement in the World Wars compelled it to continue incurring debt to maintain her forces in the war.
The emergence of a new American state that was focused to rapid economic development during and after the war compelled the congress to adopt policies that would spark economic growth and the overall financial status of the government. Such policies included the issue of large sums of money and land tracts to corporations and individuals for economic development activities. For instance, the government granted the Central Pacific and the Union of Pacific up to a hundred million acres of land. These companies were contracted to construct the railroad to the pacific coast from Missouri River. (Foner)
The period after the war was also characterized by recommendable economic growth that was triggered by abundance of the natural resources, growth of the market economy, sufficient labor force and adequate funds for investment. The commitment by the federal government to protect the American industrial and agricultural sectors was presented in the form of high tariffs that deterred success of foreign competition on the American Markets. As a result, a second industrial revolution was initiated. It was characterized by increased production in factories, and mining. This led to the establishment of a “mature industrial state” and the emergence of industrial cities.
The immigrant communities were in a position to demand for their freedom in the US after the civil war. For instance, the Indians pursued their quest for freedom in a bid to protect their political and cultural heritage. They could eventually be allowed to become American citizens by assimilation.
The end of slavery and adoption of wage labor system increased the awareness among the workers about their freedom and rights in the industrialized economy. The workers could now command wage increases and became influential in the production processes. The southerners to borrowed money to hire workers and acquire farm supplies resulting into the “crop circle” of debt in the region due to the borrowing of loans by the sharecroppers due to bad crop yields. Unable to repay their loans, the farmers had their properties seized by the creditors. These seizures shifted land ownership from individuals to corporate entities. The working men in the North and their families succumbed into poverty as they struggled to repay their loans to lenders. (Foner)
The emergent middle class citizens led more comfortable lives in the urban and suburban areas. On the Immigrants who were formerly slaves in the farms formed the wage labor force and became aware of their rights and new opportunities available to them. The capitalists accumulated massive wealth during the period. The fact that the federal government was tiny in the period immediately after the war, the local and state governments almost controlled the entire economy. The differences between the republicans, who proposed high tariffs to secure the American industry, reduced government spending and debt repayment, and the democrats, who opposed the high tariffs as well as debt repayment, founded the current rift and political conflicts between the two parties. (Foner)
These events occurring after the war contributed to the definition of the modern America both politically, economically and socially since they affected all the spheres of life. There was a transformation of the economy into industrialization, the emergence of urban centers ans well as social classes.
Works cited
Foner, Eric. Give Me Liberty!. New York: W.W. Norton & Co., 2014. Print.
