By 1900 iron and steel were the most important industries in the state. United States Steel Corporation moved into the Birmingham district in 1907, indicating its national significance. Lumbering and turpentine production also became important. Industrial growth was due in large part to the building of railroads. The value of the state’s few rail lines had come to be fully appreciated in the Civil War, when starvation was widespread because food produced in the Black Belt could not be transported into the hill country and other areas not served by navigable rivers. After the war, the Reconstruction government was determined to construct railroads, especially through the mineral district. The South also had come to appreciate an industrial economy. The coal, iron ore, and limestone deposits in Jefferson County, which had long been known but ignored, were now exploited. As railroads opened up the hill country, new towns based on industry—Birmingham, Anniston, Gadsden, and Fort Payne—grew into cities. During World War I (1914-1918) industrial and agricultural production in Alabama expanded to meet wartime needs. Mobile for a while became an important shipbuilding city despite the shallowness of Mobile Bay. The federal government spent millions of dollars clearing and keeping open the 58-km (36.5-mi) ship channel from Mobile to the Gulf of Mexico.
Economic expansion continued through the 1920s but was temporarily halted by the Great Depression of the 1930s. Alabama’s delegation in Congress, which had much seniority and legislative experience, provided leadership for the economic recovery programs of the New Deal of President Franklin D. Roosevelt (1933-1945).
These federal programs helped ease poverty in Alabama and diversify the state’s economy. One of the most important was the Tennessee Valley Authority (TVA), which provided agricultural research (especially in improvement of fertilizers), reforestation, flood control, dam building, and hydroelectric power.
South Alabama’s mild climate and flat, gently rolling countryside made it attractive for military bases and airfields.
Military expenditures during World War II stimulated economic expansion and provided civilian jobs. Mobile again became an important shipbuilding center, and the Birmingham steel plants geared up for war production.
Alabama’s economic base continued to diversify after World War II. Beginning in the 1950s, the U.S. spaceflight program at Redstone Arsenal and George C. Marshall Space Flight Center made Huntsville a leading aerospace center. Birmingham’s economy, which had depended heavily on the iron and steel industries and blue-collar labor, saw growth in medical services, insurance, manufacturing, and engineering.
Labor unions became less important, but not before wages increased. Alabama farmers turned to cattle, timber, soybeans, peanuts, and chickens, while cotton production fell. Through the 1970s, the rural population and the number of farms decreased as people moved to urban areas. The remaining farms were mostly large agribusinesses. "USA" © Emmanuel BUCHOT, Encarta, Wikipedia
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