“An empire of wealth” by John Steele Gordon (2004)

In the process of creation “empire of wealth”, the economy of the United States has experienced enormous bursts in 1800s.
Gordon tries to explain how the economy of the United States developed and change to a dynamic economy.
He begins the story from the mid 1800 when the federal government operated in deficit, the national debt increased and the treasury depleted.
In order to solving these problems, the government began to sell bonds and taxed all kind of property, rents, interests, salaries. Totally everything else was taxed as well. On the other hand, it began to printing money. The results of issuing fiat money were inflation and hoarding. In that condition congress established a system of nationally chartered banks which were allowed to issue banknotes. During the war despite the improvement of industry, in the south, most of the industries were destroyed as a result of war; the bonds and paper money issued by confederate became worthless, agriculture devastated, the cotton crop could not be exported.
With the end of the war and slavery, a new system of agriculture developed and the system of sharecropping arose. In that time the economy of south based on agriculture and extractive industry.
In The time between Civil War and world war, the American economy, changed profoundly, grew instantly and became more diversified. After the Civil War the economy of the union was a kind of unstable capitalism without regulation and regulators.
There was no central bank and mechanism to regulate the nation’s money supply. By 1900 there were many state-chartered banks which were small and financially weak. Gradually, the national banking act and the tax on banknotes issued by state-chartered banks, gave the country a uniform currency for the first time. In the following years industry and trading ameliorated; industry companies grew rapidly and railroads organized as corporations. The expansion of American railroads after Civil War was extraordinary; in fact United States established the largest railroad system in the world. Railroading became the country’s largest industry. Naturally just government could regulate this enormous industry.
Something else that influenced all sectors of economy was steel. Declining the cost of production of steel and its limitless using, enhanced the industrial power. Also, the American economy was increasingly fueled by oil. The expansion of standard oil affected the economic system profoundly.
Clearly, the growth of American industry changed the nature of American foreign trade. The United States became an exporter of agriculture and mineral products and manufactured goods. In 1900 United States exported locomotives, engines, rails, electrical machinery, wire, pipes, boilers and other goods. By 1907 American exports doubled and the United States enjoyed its prosperity.
In 1913 by the new Federal Reserve System, there was established a central bank that was the turning point in the economic history of the United States.
One of the features of United States was that the concept of primogeniture never had mean. The country prepared the condition for writers, artists, scholars and robber barons. The United States was a great cultural and intellectual power as it was an economic one.
The first years of the 20th century seemed as dawn of a new era of progress and prosperity. The country was advancing economically and socially as never before.
In fact Gordon focuses that most of the economic problems in the United States resulted from the Jeffersonian legacy of weak, and poorly regulated financial institutions-a The absence of a central bank caused many of the excessive booms and busts of the nineteenth century.
The story of “empire of wealth” is so entertaining and informative for understanding the trend of forming the robust economic system of the united state.