1.2 The Economic Boom of the 1920s

Question 1

Natural Resources

Answer 1

• Huge Coal fields in West Virginia and Kentucky
• Huge reserves of oil in Texas, Oklahoma and California
  -Possessed vast amounts of metals, iron, copper, lead

Question 2

Population

Answer 2

-In 1920, it was 106 million compared to 42 million in Britain
-By the end of WW1, millions of Europeans immigrated to the USA producing cheap labour for US businesses

Question 3

Transportation

Answer 3

-In the 19th century, there was a huge increase in railways (especially in the North-East)
-By 1916, there was 254,251 miles of railway which was used to transport raw materials
-Roads were implemented in the 1920s
-Federal Highways Act (1921) 350,000-662,000 miles by 1929

Question 4

Spirit of Enterprise

Answer 4

-Rugged Individualism created a basic for economic advance
-‘The American Dream’ suggested that anyone, no matter how poor, could become wealthy if they worked hard enough
-Self made millionaires like Henry Ford proved an example that it could be done

Question 5

Hire Purchase

Answer 5

-Between 1923 and 1929, real wages rose 13%
-Combined with low unemployment, the USA saw a major consumer boom that provided a demand for manufactured goods
-US firms offered hire-purchase schemes
-75% of cars were bought on hire-purchase schemes
-Between 1920 and 1929, consumer borrowing increased from 2 billion to 8 billion

Question 6

Other Factors (Radio, Automobile, Republican Policies, Electrification)

Answer 6

R: Birth of Mass Marketing, 10 million radios
A:By 1929, the Model T4 could be bought with $290- WITH HIRE PURCHASE, 8 million to 28 million by the end of the 20s (ownership), 7% employed workforce, people lived further away, increased living in suburbs, 26 million Ford cars
Re:Laissez Faire, taxes decreased from 50% to 20%
E:By 1929, 75% of USA had electricity but not rural areas. 1912=2.4 million goods 1929=160 million, 1 million fridges per year