3.5 The 1920s Boom

Question 1

What was the price of a Model T Ford by 1925?

Answer 1

$400

This price was equivalent to what an average worker might earn in four months.

Question 2

What was the main reason for the low cost of the Model T Ford in 1925?

Answer 2

Mass manufacturing

Electric production methods contributed to its affordability.

Question 3

How many jobs did mechanisation take away each year?

Answer 3

About 2 million jobs

This reflects the impact of mechanisation on employment.

Question 4

By how much did the American Federation of Labour lose membership?

Answer 4

1.7 million

This decline indicates challenges faced by labor organizations during this period.

Question 5

By what percentage did wheat prices fall?

Answer 5

More than 50 per cent

This significant drop affected farmers and the agricultural economy.

Question 6

What was the average annual growth rate of gross domestic product during this period?

Answer 6

2% per year

This growth rate was double the average increase in prices.

Question 7

By what percentage did real wages increase?

Answer 7

30%

This increase indicates improvements in the purchasing power of workers.

Question 8

How many films were Hollywood’s studios producing each year by 1929?

Answer 8

More than 500 films

This reflects the booming film industry during this time.

Question 9

How many people went to the movies weekly by the middle of the 1920s?

Answer 9

50 million people

This number was equivalent to half the nation’s population.

Question 10

What was a frequent event for ordinary people during this period?

Answer 10

Going to the movies

This became a common form of entertainment for the masses.

Question 11

By what percentage did the number of employed women rise during the 1920s?

Answer 11

25 per cent

This increase reflects changing gender roles in the workforce.

Question 12

What was notable about the number of speakeasies during prohibition?

Answer 12

There were more speakeasies than legal bars

This indicates the prevalence of illegal drinking establishments.

Question 13

How many households had a radio by 1930?

Answer 13

12 million households

Radios served as a source of entertainment, news, and advertising.

Question 14

What percentage of households had electricity by 1920?

Answer 14

60%

This marked a significant increase from only 12% in 1912.

Question 15

Why did Ford increase the wages of his workers?

Answer 15

To prevent rebellion and enable them to buy the newest model

This strategy aimed to ensure worker loyalty and boost sales.

Question 16

What were the key reasons for a boom?

Answer 16

• First world war
• Republican policies
• Consumerism
• Car industry
• Technology
• Credit
• Confidence

Question 17

Why was WW1 a reason for the boom?

Answer 17

• Stimulated manufacturing and agriculture industries
• American exports in world markets while Europe was preoccupied
• Employment opportunities
• US loaned to Europe

Question 18

Why were Republican policies a reason for the boom?

Answer 18

• No regulation in the stock market - allows for speculation
• Reduction in interest rates to boost big business
• Taxes kept low

Question 19

Why was consumerism a reason for the boom?

Answer 19

• Growth in advertising
• Stimulated economy when people buy things
• Demand for goods that had once been seen as luxuries
• Growing urban population

Question 20

Why was the car industry a reason for the boom?

Answer 20

• Subsidiary industries (steel, rubber, petroleum, construction)
• Price of car dropped
• Expansion of cities and development of suburbs - construction industry
• Development of roads
• More jobs

Question 21

Why was technology a reason for the boom?

Answer 21

• Demand for electricity
• Mass production of goods such as cars
• New industries such as radios and vacuum cleaners

Question 22

Why was credit a reason for the boom?

Answer 22

• Hire purchase
• People could buy luxury goods
• Increase in demand

Question 23

Why was confidence a reason for the boom?

Answer 23

• People took credit out of the bank which stimulated consumerism
• Stock market grew in value
• Buying on the margin

Question 24

What is a cartel?

Answer 24

A group of companies agreeing to fix output and prices in order to reduce competition and increase profits

Question 25

What is a holding company?

Answer 25

Where one very large company obtains a controlling interest in smaller companies in order to control the market

Question 26

What is consumerism?

Answer 26

An increase in the production of consumer goods on the grounds that high spending is the basis of a sound economy

Question 27

What is hire purchase?

Answer 27

‘Buy now pay later’ a system of credit whereby a person may purchase an item by making regular payments while already having the use of said item

Question 28

What is buying on the margin?

Answer 28

If people didn’t have enough money to buy a share, they would make the deposit, borrow the rest, wait until the value of the share had increased before selling the share, paying off the debt and having made an overall profit

Question 29

What is an example of the rich businessmen profiting from Republican policies?

Answer 29

By 1929, the largest 200 corporations possessed 20% of the nation’s wealth

Question 30

How many of the goods sold in the 1920s were paid for by hire purchase?

Answer 30

About half

Question 31

How did the worth of the stock market change between 1925 and 1929?

Answer 31

From $27bn to $87bn

Question 32

Which sections of society did not experience a boom?

Answer 32

• Farmers
• Those in rural areas
• African Americans