American economic history 8th edition hughes test bank

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Chapter 8 Transportation, Internal Improvements, and Urbanization ◼ True/False Read each statement carefully. Identify whether it is true or false using the economic historian’s way of thinking.

1. The early U.S. canals and railroads were built by private enterprise without the aid of governments.

Answer:

False

2. According to Fishlow’s (1972) work, the U.S. railroads before the Civil War were typically built “ahead of demand” by private capital.

Answer:

False

3. Most canals were economic failures.

Answer:

True

4. The percentage of the population that lived in urban areas rose from approximately 5% in 1790 to 40% in 1860.

Answer:

False

5. Railroad competition was the primary cause of canal failures.

Answer:

False

6. Productivity, or output per labor hour, rises as transportation costs fall.

Answer:

True

7. During the antebellum period, factories grew, in part, due to internal economies of scale.

Answer:

True

8. The Gallatin Plan (1808) was not passed because some individuals questioned its constitutionality.

Answer:

True

9. Roads during the 1800s proved to be a preferred transportation alternative to railroads and thus competed successfully for profits.

Answer:

False

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10. Internal improvements are important to a developing and growing economy.

Answer:

True

11. As the transportation system developed in the U.S., urbanization occurred.

Answer:

True

12. Commercialization, market growth and factories emerged in rural areas.

Answer:

False

13. The benefits of urbanization include: crime, pollution, increased taxation and congestion.

Answer:

False

14. Railroads attracted funds from foreign investors.

Answer:

True

15. Contrary to many researchers’ views, Hurst (1969) claims the government needed private investors to fund internal improvements.

Answer:

True

◼ Multiple Choice Using the economic way of thinking and holding all else constant, choose the best answer among those provided.

1. Which transportation industry did government invest most heavily in before 1860? (a) Turnpikes (b) Canals (c) River steamboats (d) Railroads Answer:

(d)

2. Which of the following is not a valid criticism of Fogel’s (1964) methodology in his study of railroads? (a) The canal prices used for 1890 were low. (b) The impact of railroads on financial markets is ignored. (c) The nonpecuniary gains from using railroads could have been considered. (d) The amount of land cultivated would have been reduced.

Answer:

(d)

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Chapter 8

Transportation, Internal Improvements, and Urbanization

3. Which of the following statements is supported by the research of economic historians? (a) Canals and railroads were built with a mixture of private and public enterprise and financing. (b) Canals and railroads were built largely without U.S. government participation. (c) Canals were built with public assistance, but railroads were built with almost no government assistance. (d) Railroads were built with public assistance, but canals were built by private enterprise.

Answer:

(a)

4. Private initiative and financing were most important in (a) the canal system of transportation. (b) the steamboat system. (c) the railroad system. (d) none of the transportation systems.

Answer:

(b)

5. Railroads had advantages over canals in all respects except (a) year-around service. (b) speed of delivery. (c) full access to shipping points. (d) there is no “except”; all of the above were advantages of railroads.

Answer:

(d)

6. During the great canal-building era, from roughly 1815 to 1843, Hughes and Cain (2011) claim that (a) most canals earned normal profits. (b) no canals earned profits. (c) all canals in the initial period of construction earned normal profits but none did in the later period because of over-construction and competition from the railroads. (d) the Erie Canal was one of the few, perhaps the only one, to earn normal profits.

Answer:

(d)

7. The Gallatin Plan (1808) to provide internal land and water transport in the eastern part of the country was a plan that (a) called for the federal government to finance and build the transport system. (b) called for the eastern states to join together to finance and build the system. (c) called for private financing and building with some federal government assistance in coordinating and planning the transport system. (d) relied primarily on city and county governments to provide the bulk of the financing and building of the transport system.

Answer:

(a)

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8. The Gallatin Plan (1808) (a) was a plan by the U.S. Senate for a comprehensive system of internal land and water transport in the eastern part of the country to be built by the federal government. (b) was promoted on the basis that only the federal government could command sufficient resources to build a transportation system. (c) was partially implemented but not completed by the federal government because of concerns about the constitutionality of such federal action. (d) was characterized by all of the above.

Answer:

(d)

9. The turnpikes built in the early 1800s were (a) intercity toll roads. (b) highly profitable enterprises. (c) financed entirely by private enterprise. (d) regulated by the federal government.

Answer:

(a)

10. Historians are in general agreement that (a) railroads opened the country and were built at great risk ahead of demand, gambling on the future. (b) railroads sharply cut down transportation costs, linking the country together in all directions and spurring the nation’s growth far in advance of anything that might otherwise have been achieved. (c) railroads were the single innovation of the 19th century that created a great leap forward in terms of American economic growth. (d) none of the above are true.

Answer:

(d)

11. Which statement best describes the railroad? (a) It is a good example of “technology transfer” (from England to the U.S.)—the first operating railroad was in England. (b) It is an American home product—the first operating railroad was in the U.S. (c) It was invented in England but first put into operation in the U.S. (d) It was invented in the U.S. but first put into operation in England.

Answer:

(a)

12. Government participation in railroad construction was highest in (a) New England. (b) the South. (c) the Midwest. (d) the Great Lakes Region.

Answer:

(b)

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Chapter 8

Transportation, Internal Improvements, and Urbanization

13. Robert Fogel (1964) demonstrates that (a) the social saving of the railroad was large; much of the country (over 25%) could not have been settled and cultivated without the railroad. (b) the canal and river systems of transportation could very nearly have produced the same results as the railroad in terms of land cultivated. (c) the railroad was responsible for a great “take-off” in terms of economic growth in the 19th century. (d) the railroad gave a huge boost to the iron industry because for a time it consumed well over 50% of all iron produced.

Answer:

(b)

14. “External economies” derive from all of the following except (a) the joint use of transportation facilities. (b) labor force concentrations in urban areas. (c) social overhead facilities such as police and fire protection. (d) economies of management associated with large firms.

Answer:

(d)

15. The growth of cities was due to the existence of important scale economies, which include all of the following except (a) Central water and sewer systems (b) Education systems (c) Crime, congestion and pollution (d) Police and fire protection Answer:

(c)

16. Why do historians argue that there was a mixture of enterprise, partly private and partly governmental, in building our transportation system? (a) Private individuals took the initiative and were able to extract special privileges and financial assistance from government for the purpose of enhancing their profits. (b) Political leaders, who wanted transportation improvement for reasons of local or national ambition, took the initiative and coaxed private enterprise into building the transportation system by the offer of special financial advantages. (c) The sheer size of the investment required for a transportation system was beyond the capability of private enterprise alone. (d) All of the above ideas have been used by historians to explain the mixture of enterprise in building our transportation system.

Answer:

(d)

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17. “Internal economies” derive from all of the following except (a) Division of labor (b) Production of standardized products (c) The use of mass production techniques (d) There is no “except”; all of the above apply Answer:

(d)

18. Historians generally agree that the railroads (a) were absolutely essential for industrial growth in the 19th century. (b) were an indispensable “leading sector.” (c) were our first “giant” enterprises. (d) provided a “social saving” of 90% or more.

Answer:

(c)

19. The efficiency of steamboats was commonly measured by (a) the carrying capacity of the steamboat fleet in terms of tonnage. (b) per unit labor costs per vessel. (c) the tonnage per vessel transported upstream. (d) the actual tonnage transported up and downstream each day.

Answer:

(a)

20. Which of the following contributed to the increase in steamboat productivity? (a) Improvements in ship design (b) Better docking stations (c) Increased competition by railroads (d) All of the above Answer:

(d)

21. Funding for canals came from which of the following sources? (a) Private investments and tolls (b) Taxes (c) Borrowing on government credit (d) All of the above Answer:

(d)

22. Business cycles can be described best as (a) being pervasive during the antebellum period but their effects were isolated to the private sector. (b) being pervasive during the antebellum period but their effects were isolated to the public sector. (c) being pervasive during the antebellum period and their effects were felt both in the private and public sectors. (d) uncommon during the antebellum period but their effects were felt significantly when present.

Answer:

(c)

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Chapter 8

◼

Transportation, Internal Improvements, and Urbanization

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Essay Questions

1. Discuss the changes in the distribution system (how goods get from the locus of production to the locus of consumption) of the antebellum American economy.

2. What advantages did the railroad have over the other means of transportation during the pre-Civil War era? Why has modern scholarship deflated the importance of the railroads’ role in U.S. history?

3. In general, when were transportation and communications costs significant barriers to developing an integrated internal market system in the U.S.? Why did these costs vary between North and South?

Between East and West? What broke down these barriers?

4. Interpret the economic importance of Figures 8-1 and 8-2. Identify the advantages and disadvantages of the canal and railroad systems of transportation. Discuss the economic debate over the railroad system’s contribution to economic growth.

5. Why were immigrants attracted to urban areas?

6. Why did the U.S. transportation systems and urban areas attract many human and material resources away from agriculture?

7. Explain why productivity may rise when railroads, turnpikes, canals and roads help decrease transportation costs. Discuss the roles of specialization and operating on the basis of comparative advantage in a world of low transportation and transactions costs.

8. How was the development of the canal and railroad systems in the U.S. funded? Discuss the economic pros and cons of these funding resources.

9. Discuss the roles that improvements and investments in the different kinds of transport, specifically turnpikes, canals, riverboats, ocean transport and railroads, played in the growth of the American West’s economy. Cite the work of noted economic historians.

10. Analyze the role that improvements and investment in transportation played in the rise of interregional trade in the U.S., especially with respect to the West. Discuss specific changes in water and overland transportation methods.

11. What is a business cycle? Discuss whether business cycle swings and turning points had any link to developments in (i) canals and (ii) railroads.

12. Identify and describe the traits of U.S. urbanization during the antebellum period.

13. Compare and contrast external and internal economies. Explain the links of both to urbanization.

14. Discuss the positive and negative externalities of urbanization.

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