1.1 Economic Boom Flashcards
1.1 Mass Production
technological advances = a virtual second industrial revolution
Henry Ford (Ford model T)
- established a car manufacturing plant in Detroit, Michigan prior WW1
- introduced the production line (revolutionary)
-(individual workers learned how to assemble only one specific part of a car = line moved at a steady paces, setting rate of production
= employee low skilled and semi skilled workers
1913= 12.5 hrs to produce car
mass production = 2 hrs 40 mins
1920= 8 million cars in USA
1929= 26 million
Mass production = higher output and lower prices
Scientific management - Fredrick Taylor
time and motion studies
= time efficient way of manufacturing goods could be adopted to improve process = lower labour costs and higher profits
Creation of large industrial corporations
companies could benefit from EOS and lower raw materials costs = pass on lower costs to customers
eg: Samuel Insull controlled 111 separate but linked corporation = value of $3bil
1.1 Technological advances and impact on leisure
advertising aided by tech = stimulant to consumer spending
KDKA - first commercial radio station 1920
(became a model for others)
radio shows were sponsored by corporations advertising their goods
1929- 619 commercial radios stations = vast audience for advertisers
19302 - 75% of households had a radio
1929- Every town had a cinema ( opportunity for advertising)
car impact on leisure=
new roads provided opportunity for advertising through billboards
allowed workers to lie further away fro their place of work = growth of suburbs
= stimulate leisure industry
- seaside resorts, New Jersey, Atlantic city grew rapidly as destinations
Electrification (75% of homes 1929)
= developlemtn of radios vacuums and toaster
1912= 2.4 mil appliances
1929= 160 mil
BUT centred on towns and cities , 1929, rural parts still without electricity
1.1 The automobile
car registrations increased from
8 mil 1920
28 mil 1929
1920:
Ford production ed 1.25 million cars , one every sixty seconds
100,000s were involved in car manufacture - 375,000 workers / 7% of manufacturing workforce, paying 9% of all wages
stimulated growth of other industries - steel, rubber and glass - demand for cars= demand for materials
increased demand for petrol = stimulate oil industry and emergence of petrol stations, motels and garages
car impact on leisure=
new roads provided opportunity for advertising through billboards
allowed workers to lie further away fro their place of work = growth of suburbs
= stimulate leisure industry
- seaside resorts, New Jersey, Atlantic city grew rapidly as destinations
car would allow a man “to enhoy his family with the blessings of pleasure in Gods open spaces”
developments added by federal government - 1921 Federal Highways Act = gov responsibility to build roads
350,000 miles increased to 662,000 miles by 1929 = boost construction company
1.1 Hire Purchase
1920s: low unemployment and low inflation
Real wages rose 13% between 1923 and 1929
= basis one consumer boom that provided the demand for mass produced goods
- Average wages rose from $1,308 to $1,716 per year in the USA in the 1920s, at a time of low inflation.
to encourage more spending the firms offered hire purchase schemes
75% of cars
1920 - consumer borrowing was $2 b
1929- $8 b
= stimulates belief that economic boom would be never ending and would avoid business cycle of bust
1.1 laissez faire policy
1920s dominance for Republican Party in presidential elections and congress
“business of America is business” - Coolidge
laissez faire to aid development of bug businesses
aimed to:
- lower taxes
- reduce government regulation
policies
- Fordney McCumber tariff : places tariffs on foreign goods imported into USA = increased profits of the American goods (chemicals, textiles and farm goods)
BUT did nothing to deal with agricultural overproduction + led to fall in farm prices - Andrew Mellon adopted a low tax policy = taxes on rich were lowered from 50% to 20% via series of Revenue Acts
( Mellon handed out $3.5 b in tax reductions + supported reduction in public spending) - glanced federal budget = gov operated on a surplus and helped reduce US national debt
- Federal Trade commission reduced regulations on business. price filing by business to raise profits were ignored.
- little attempt to regulate hours of work or use of child labour and wage rates were kept low
= favoured businesses
1.1 Farmers limits to the boom
economy created unrivalled prosperity but several social groups missed out
Farmers:
had boomed during war (prices rose 82%)
BUT European agriculture began to recover and demand for US exports dropped and so did prices
technological advances -
combine harvestor = unemployment
overproduction (66% operated on a loss)
boll weevil affected cotton
grain demand fell due to prohibition =wheat price fall from $2.50 to $1
small farmers found it difficult to keep up
- For the first time in American history more people lived in towns than the countryside. The number of farms declined and 13 million acres of cultivated land was abandoned (1920-30).
attempts to aid farmer s - McNary Haugen bill (attempt to stabilise agricultural prices with the gov buying surplus stocks )- failed in congress - dominated by laissez faire
AID:
Department of Agriculture under Secretary Wallace. The Agricultural Credits Act of 1923 gave low interest loans to farmers.
The Capper-Volstead Act of 1923 encouraged the creation of farm cooperatives
1.1 Black Americans limits to the boom
majority still lived in the south east - suffered legal and social discrimination
* The existence of segregation, and the resulting poor education, reinforced their poor social and economic position
Many were sharecroppers 14% of farmers were african americans
Share croppers stuck in cycle of high rent and low crops
poor farmers buying seeds and renting land from a large land owner that would pay back with harvest profits
Low profits =could not afford land
Always less well off than those who owned the land as they would make money regardless of harvest success
outside of south east= given most menial and low paid jobs - labourers, railways clerks and servants lived in areas of poor quality housing - ghettos
1920s- biggest mass migration of black ameriacsn
nearly a million left south east for jobs in the prosperous northern industrial cities, Detroit, New York and Chicago
1929-manufacturing employment in large numbers for the first time
