Name: ______
WHAP 101
KEY CONCEPT 5.1: INDUSTRIALIZATION & GLOBAL CAPITALISM
Part II- Financial Institutions and Global Capitalism
Standard / 4.0 / 3.5 / 3.0 / Not a 3.0 yet65 – 55.5 points / 55- 45 points / Less than 45 points / 65 – 55.5 points
Daily Work
Take complete notes of the packet ______/10 points
Complete Graphic Organizer ______/5 points
Assessments-
Short Answer Questions
SAQ- Causation _____/15 points - Every point earned on rubric x 5
SAQ- Argumentation_____/15 points -Every point earned on rubric x 5
Vocabulary Test _____/20 points
Part I- Financing the Industrial Revolution
To facilitate investments at all levels of industrial production, financiers developed and expanded various financial institutions.
In the Modern Era many new financial institutions and philosophies were forming because of all of the investments that were made in industrial production. Many of these new financial institutions and philosophies would transform the way that global trade and business are conducted, some until the present date.
A)Identify and explain one transformation that happened in financial institutions in the Modern Era
B) Identify and explain ANOTHER transformation that happened in financial institutions in the Modern Era
C)Identify and explain one transformation that happened in financial institutions in another Era of History
Vocabulary
Capitalism
Definition
Historical Significance
Adam Smith
Definition
Historical Significance
Classical Liberalism
Definition
Historical Significance
John Stuart Mill
Definition
Historical Significance
Economic and civil Life
Definition
Historical Significance
Laissez Faire Economics
Definition
Historical Significance
Joint Stock Company
Definition
Historical Significance
Stock Market
Definition
Historical Significance
United Fruit Company
Definition
Historical Significance
Hong Kong and Shanghai Banking Corporation (HSBC) –
Definition
Historical Significance
Gold Standard
Definition
Historical Significance
3. To facilitate investments at all levels of industrial production, financiers developed and expanded various financial institutions.
Take notes from APWorldipedia 5.1 section-
III. To facilitate investments at all levels of industrial production, financiers developed and expanded various financial institutions.
A dramatic of Adam Smith explaining Capitalism -
Watch the video – and focus on the following concepts-Capitalism vs Mercantilism
-The Invisible Hand
-The role of competition
Classical Liberalism vs. American Liberalism (Drive Home History #3)
Watch from 1:35 –What did Classic Liberals want from the government?
Joint-Stock Company-
Stock Markets in Plain English Animated.mp4-
Take notes on the following article about the United Fruit Company that was in Colombian and Central America- The information comes from Wikipedia
United Fruit Company - Corporate history[edit]
Early history[edit]
In 1871, U.S. railroad entrepreneurHenry Meiggssigned a contract with the government ofCosta Ricato build a railroad connecting the capital city ofSan Joséto the port ofLimónin theCaribbean. Meiggs was assisted in the project by his young nephewMinor C. Keith, who took over Meiggs's business concerns in Costa Rica after his death in 1877. Keith began experimenting with the planting of bananas as a cheap source of food for his workers.[2]
When the Costa Rican government defaulted on its payments in 1882, Keith had to borrow£1.2 million from London banks and from private investors in order to continue the difficult engineering project.[2]In exchange for this and for renegotiating Costa Rica's own debt, in 1884, the administration of PresidentPrósperoFernándezOreamunoagreed to give Keith 800,000 acres (3,200km2) of tax-free land along the railroad, plus a 99-year lease on the operation of the train route. The railroad was completed in 1890, but the flow of passengers proved insufficient to finance Keith's debt. On the other hand, the sale of bananas grown in his lands and transported first by train to Limón, then by ship to the United States, proved very lucrative. Keith eventually came to dominate the banana trade in Central America and along the Caribbean coast ofColombia.
United Fruit (1899–1970)[edit]
In 1899, Keith lost$1.5 million when Hoadley and Co., a New York City broker, went bankrupt.[2]He then traveled toBoston,Massachusetts, to participate in the merger of his banana trading company,Tropical Trading and Transport Company, with the rival Boston Fruit Company. Boston Fruit had been established byLorenzo Dow Baker, a sailor who, in 1870, had bought his first bananas inJamaica, and byAndrew W. Preston. Preston's lawyer,Bradley Palmer, had devised a scheme for the solution of the participants' cash flow problems and was in the process of implementing it. The merger formed the United Fruit Company, based in Boston, with Preston as president and Keith as vice-president. Palmer became a permanent member of the executive committee and for long periods of time the director. From a business point of view, Bradley Palmer was United Fruit. Preston brought to the partnership his plantations in theWest Indies, a fleet of steamships, and his market in the U.S. Northeast. Keith brought his plantations and railroads in Central America and his market in the U.S. South and Southeast. At its founding, United Fruit was capitalized at $11,230,000. The company at Palmer's direction proceeded to buy or buy a share in 14 competitors, assuring them of 80% of the banana import business in the United States, then their main source of income. The company catapulted into financial success. Bradley Palmer overnight became a much-sought-after expert in business law, as well as a wealthy man. He later became a consultant to presidents and an adviser to Congress.
In 1901, the government ofGuatemalahired the United Fruit Company to manage the country's postal service and in 1913 the United Fruit Company created theTropical Radio and Telegraph Company. By 1930 it had absorbed more than 20 rival firms, acquiring a capital of $215,000,000 and becoming the largest employer in Central America. In 1930,Sam Zemurray(nicknamed "Sam the Banana Man") sold hisCuyamel Fruit Companyto United Fruit and retired from the fruit business. In 1933, concerned that the company was mismanaged and that its market value had plunged, he staged a hostiletakeover. Zemurray moved the company's headquarters toNew Orleans,Louisiana, where he was based. United Fruit went on to prosper under Zemurray's management;[3][4]Zemurray resigned as president of the company in 1951.
Banana Land: Blood, Bullets and Poison-
Watch from 4:10 – 6:30Take notes on Hong Kong and Shanghai Banking Corporation (HSBC) – A large corporation- the information if from Wikipedia
History[edit]
Origins, and until 2000[edit]
For more information on the history of HSBC prior to the founding of HSBC Holdings in 1991, seeThe Hongkong and Shanghai Banking Corporation.
"The Hongkong and Shanghai Bank" was founded by ScotsmanSir Thomas Sutherlandin the then British colony ofHong Kongon 3 March 1865, and in Shanghai a month later, benefiting from the start of trading into China, includingopiumtrading.[21]It was formally incorporated as "The Hongkong and Shanghai Banking Corporation" by an Ordinance of theLegislative Councilof Hong Kong on 14 August 1866.[2]In 1980, HSBC acquired a 51% shareholding in US-basedMarine Midland Bank, which it extended to full ownership in 1987. On 6 October 1989, it was renamed by the Legislative Council, by an amendment to its governing ordinance originally made in 1929, "The Hongkong and Shanghai Banking Corporation Limited", and became registered as a regulated bank with the thenBanking Commissioner of the Government of Hong Kong.[22]
Take notes on the following website- HSBC's history
Establishment and early years
HSBC is named after its founding member, The Hongkong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between Europe, India and China.
The inspiration behind the founding of the bank was Thomas Sutherland, a Scot who was then working for the Peninsular and Oriental Steam Navigation Company. He realised that there was considerable demand for local banking facilities in Hong Kong and on the China coast, and he helped to establish the bank which opened in Hong Kong in March 1865 and in Shanghai a month later.
Soon after its formation, the bank began opening branches to expand the services it could offer customers. Although that network reached as far as Europe and North America, the emphasis was on building up representation in China and the rest of the Asia-Pacific region. HSBC was a pioneer of modern banking practices in a number of countries – for instance, in 1888 it was the first bank to be established in Thailand, where it printed the country's first banknotes.
From the outset trade finance was a strong feature of the local and international business of the bank, an expertise that has been recognised throughout its history. Bullion, exchange, merchant banking and note issuing also played an important part. In 1874, the bank handled China's first public loan and thereafter issued most of China's public loans.
By the end of the century, after a strong period of growth and success under the leadership of Thomas Jackson (chief manager for most of that period from 1876 to 1902), the bank was the foremost financial institution in Asia.
Take notes from the Wikipedia article on the Gold standard
Gold standard
From Wikipedia, the free encyclopedia
Agold standardis amonetary systemin which the standardeconomicunit of accountis based on a fixed quantity ofgold. Three types can be distinguished: specie, bullion, and exchange.
- In thegold specie standardthe monetary unit is associated with the value of circulating gold coins or the monetary unit has the value of a certain circulating gold coin, but other coins may be made of less valuable metal.
- Thegold bullion standardis a system in which gold coins do not circulate, but the authorities agree to sellgold bullionon demand at a fixed price in exchange for the circulating currency.
- Thegold exchange standardusually does not involve the circulation of gold coins. The main feature of the gold exchange standard is that the government guarantees afixed exchange rateto the currency of another country that uses a gold standard (specie or bullion), regardless of what type of notes or coins are used as a means of exchange. This creates ade factogold standard, where the value of the means of exchange has a fixed external value in terms of gold that is independent of the inherent value of the means of exchange itself.
In modern times, theBritish West Indieswas one of the first regions to adopt a gold specie standard. FollowingQueen Anne's proclamation of 1704, the British West Indies gold standard was ade factogold standard based on the Spanish golddoubloon. In 1717, SirIsaac Newton, the master of theRoyal Mint, established a new mint ratio between silver and gold that had the effect of driving silver out of circulation and putting Britain on a gold standard.[13]
A formal gold specie standard was first established in 1821, whenBritainadopted it following the introduction of thegold sovereignby the new Royal Mint atTower Hillin 1816. TheUnited Province of Canadain 1853,Newfoundlandin 1865, and theUnited Statesand Germany (de jure) in 1873 adopted gold. The United States used theeagleas its unit, Germany introduced the newgold mark, while Canada adopted a dual system based on both the American gold eagle and the British gold sovereign.
AustraliaandNew Zealandadopted the British gold standard, as did the British West Indies, while Newfoundland was the onlyBritish Empireterritory to introduce its own gold coin. Royal Mint branches were established inSydney,MelbourneandPerthfor the purpose of minting gold sovereigns from Australia's rich gold deposits.
What is the Gold Standard? - Learn Liberty-
Watch until 1:50Part II – Responses and Changes to the Spread of Global Capitalism
In the era of the Industrial Revolution, Global Capitalism spread very quickly and would forever change and transform the world. There were many different responses and reactions to the spread of Global Capitalism
- Identify and explain one Change that occurred in society because of the spread of Global Capitalism during the Industrial Revolution.
- Identify and explain Another change that occurred in society because of the spread of Global Capitalism during the Industrial Revolution.
- Identify and explain one Continuity in society both before and after the spread of Global Capitalism during the Industrial Revolution.
Vocabulary
Utopian Socialism-
Definition
Historical Significance
Robert Owen
Definition
Historical Significance
Karl Marx
Definition
Historical Significance
Communism
Definition
Historical Significance
Communist Manifesto
Definition
Historical Significance
Proletariat
Definition
Historical Significance
Bolsheviks
Definition
Historical Significance
Anarchism –
Definition
Historical Significance
Trans-Siberian Line
Definition
Historical Significance
Tanzimat Movement
Definition
Historical Significance
Self- Strengthening Movement-
Definition
Historical Significance
Muhammad Ali (Egypt)
Definition
Historical Significance
Germany state pensions and Public Health-
Definition
Historical Significance
Public Education-
Definition
Historical Significance
Middle Class (Bourgeoisie)
Definition
Historical Significance
Social Darwinism
Definition
Historical Significance
Women Factory workers-
Definition
Historical Significance
Cult of Domesticity –
Definition
Historical Significance
Dr. John Snow
Definition
Historical Significance
5. The development and spread of global capitalism led to a variety of responses.
Read and take notes from the APWorldipedia 5.1 section-
V. The development and spread of global capitalism led to a variety of responses.
Take notes on the following video posted on Mr. Wood’s Website
- utopian socialism - (Watch with close capitions on!)
Watch the following biography from Mr. Wood’s website - Karl MarxBiography-
Take notes on the following video by the brilliant lecturer on Mr. Wood’s webpage -Karl Marx and Command Economies- Watch from the beginning to 5:35
Take SCAP notes from the following quotes from Karl Marx
- The proletarians (working class) have nothing to lose but their chains.
- The theory of the Communists may be summed up in the single sentence: Abolition of private property.
- You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths. You reproach us, therefore, with intending to do away with a form of property, the necessary condition for whose existence is the non-existence of any property for the immense majority of society.
- Communism deprives no man of the ability to appropriate the fruits of his labour. The only thing it deprives him of is the ability to enslave others by means of such appropriations.
- The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establishconnexions everywhere.
S- Speaker
What’s the speaker’s POV?
C- Context
Does this fit in an “age” or an “era”?
A- Audience
Who is the speaker writing for? Does the audience “side” with the speaker?
P- PurposeCan you summarize in one sentence, the main idea, argument, or persuasion in the doc?
Take notes on the following reading from Mr. Wood’s Website - Russian industrialization
The reforms embraced by Alexander II in the early 1860s were partly designed to stimulate transitions in the Russian economy. Emancipating the serfs (1861) was not just a social reform, it was also intended to release them from the land and the control of conservative land-owners. Alexander and his advisors anticipated that a large proportion of freed serfs would become a mobile labour force, able to relocate to areas where industrial workers were needed. They also believed that given greater freedom, the peasants would develop more efficient and productive ways of farming. One of the anticipated outcomes of 1861 was the emergence of a successful peasant class, thekulak. Thekulakwould be proto-capitalist: he would own larger tracts of land and more livestock or machinery; he would hire landless peasants as labourers; he would use more efficient farming techniques; and he would sell surplus grain for profit. But while the 1861 emancipation did release millions of peasants from their land, the strength of peasant communes prevented the widespread development of akulakclass.
The emancipation had significant social outcomes but it failed to contribute much to Russia’s economic development. In the 1870s the government initiated several large infrastructure programs, particularly the construction of railways. The 1880s saw the emergency ofSergei Witte, a qualified mathematician with a proven track record of achievement, both in the tsarist bureaucracy and the private sector. In 1889 Witte was placed in charge of the Russian railway system, where he oversaw the planning and construction of the Trans-Siberian Railway. By 1892 Witte was minister for transport, communication and finance. Identifying a need for capital investment, Witte made it easier for foreigners to invest in Russian industrial ventures. Existing barriers were removed, while foreign individuals and companies were offered incentives if they invested in certain industrial and manufacturing sectors. Witte also undertook currency reform: in 1897 he moved the Russian rouble to the gold standard, strengthening and stabilising it and improving foreign exchange. He also borrowed to fund public works and infrastructure programs including new railways, telegraph lines and electrical plants.
“The state participated directly in the nation’s economy to an extent unequalled in any Western country. In 1899 the state bought almost two-thirds of all Russia’s metallurgical production. By the early 20th century it controlled some 70 per cent of the railways and owned vast tracts of land, numerous mines and oil fields, and extensive forests. The national budgets from 1903 to 1913 indicated that the government received more than 25 per cent of its income from various holdings. Russia’s economic progress in the eleven years of Witte’s tenure as minister of finance was, by every standard, remarkable. Railway trackage virtually doubled, coal output in southern Russia jumped from 183 million poods in 1890 to 671 million in 1900.”
Abraham Ascher, historian
By the late 1890s, Witte’s reforms had had a visible impact on the Russian economy. Large amountsof foreign capital, mostly from France and Britain, had funded new plants and factories in St Petersburg, Moscow, Kiev and other cities. By 1900 around half of Russia’s heavy industries were foreign-owned – but the Russian empire was the world’s fourth-largest producer of steel and its second-largest source of petroleum.New railways allowed transport into remote parts of the empire, allowing the construction and operation of factories, mines, dams and other projects there. Russia’s industrial economy had progressed more in one decade than it had in the previous century. Its development was so rapid that the economic historian Alexander Gerschenkron later dubbed it “the great spurt”.