The Social and Economic Effects of the Global Flow of Silver Today, silver is precious and expensive and not used as an everyday thing, however, between 1500 and 1750, silver was essential around the world. The global flow of silver produced social and economic effects worldwide. Europe, Asia, South and North America were all greatly affected by this. In China, the Ming Dynasty ordered taxes and trade fees were paid in silver. The heavy flow of the silver greatly affected China's economy.
Known also as Black Tuesday, October 29th left stockholders shattered with recorded losses reaching $40 billion dollars (Kelly, n.d.). Many banks and financial institutions began collapsing which led to irretrievable, uninsured deposits and savings. Fearing further loss, people began spending less which led to a decrease in production and an increase in unemployment. As companies began to fail, the government devised the Smoot-Hawley Tariff in order to protect American businesses. The Tariff placed high taxes on imports leading to a decline in international trade.
The authors of a court official in the Ming dynasty, after nearly 20 years of the domestic silver tax, attempts to address the difficulties faced by farmers. Wang believes that that the silver tax is responsible for increasing poverty by farmers in the courtside. A court order, issued in the 1570s soon after the imposition of the silver tax, may be attempting to refute this opinion. The emphasis of the author on a frugal man and an extravagant man in document 1, while advocating the frugality of silver use, may be attempting to assuage the fears of the average Chinese people that this tax will be financially deleterious to
The populist movement was a period in history where America was plagued with a lot of corruption and economic issues. The gold standard was causing deflation, the farmers were trying to gain political power, many businesses were being monopolized, and so much more. The gold standard was one of the biggest debate points of the election of 1896. William Jennings Bryan, the Democratic candidate, was a large supporter of free silver. Free silver, if put into the economy, would most likely cause inflation and help the farmers.
-They would all become rich and poverty would just go away (Words of President Calvin Coolidge) Doc C: John T. Raskob, a well-known economist, told people to buy more stocks and in invest in banks and you’ll become a millionaire. -The chart in document K, shows that 20% of the income goes away if they listen to Raskob’s advice to fifteen dollars in the bank every month. When the banks failed, those people lost all that was in there. Doc G+H: With the new types of credit, margin and installment, millions were buying things they didn’t even have the money for. -They would take out a loan from the bank, but they could never pay them back and this hurt the businesses too
URBAN GROWTH AND DECLINE Where is it happening? Broken Hill Why there? Mining: The mining industry is what put BH on the map. Over 100 tears of constant mining has resulted in depleted resources.The prosperity of mining in BH hinges on several things. The strength of the Aussie dollar impacts on exporting, metal prices effect profits, and a slowdown in the global economy will reduce the demand (particularly from China) for the metal produced in BH.
In a lecture by Professor Newman, it was made known of the concept “selling short”, meaning, big businessmen would try to make more money on a market they knew was going down, and with that came a lot of common people losing money. When prices started to collapse over 40 billion dollars’ worth of stock value suddenly disappeared, and so did people’s money. With this caused the famous stock market crash in 1929. Almost immediately big businessmen started shutting down factories and firing employees and the demand for products went down, and with that, unemployment reached 15 million. In the lecture, Professor Newman uses the example of steel to show how much stocks declined.
The strength of the economy encouraged Americans to take out more loans and buy more stocks, making them susceptible to future changes in the economy. The freedom caused financial markets to crash globally which helped power the Great Depression. Another example of lack of government intervention was the robber barons, a term referring to the wealthy and powerful businessmen in the 18th century. They were also known as “pure capitalists”, because they believed in an economic system that involved minimal interference from the government. Those working for robber barons were beaten and threatened, and the working conditions were terrible.
The Trans-Atlantic trading system mainly took silver from deposits in Potosí, Bolivia, thus, creating a connection to the old and new world. By trading silver with Chinese, who only accepted silver from the Americas, it created a high demand for silver, allowing an increase in global economy. Resulting in the middle passage, the Trans-Atlantic had a gigantic involvement with slaves, who kept up sugar plantations, thus, connecting West Africa to the Caribbean and America to Western Europe. In contrast to the Trans-Atlantic, the Indian Ocean trade connected East to West Africa and Europe to Africa. Goods traded along the system included silk and porcelain from China, spices from SE Asia and peppers, pearls, and cotton from India.
By 1933, almost half of those banks had failed. Two economists of the 1920s, Waddell Catchings and William Trufant Foster, popularized a theory that influenced many policy makers, including Herbert Hoover, Henry A. Wallace. It held the economy produced more than it consumed, because the consumers did not have enough income. Thus the unequal distribution of wealth throughout the 1920s caused the Great Depression. According to this view, the root cause of the Great Depression was a global over-investment in heavy industry capacity compared to wages and earnings from independent businesses, such as farms.