American people and the 'Boom' Flashcards
What is the definition of an economic boom?
-When a country enters a period when the vast majority of businesses are doing well, sales are high, wages increase and unemployment is low
How did WW1 contribute to the economic boom that happened in America?
- The US stayed out of the war (isolationism) which allowed them to loan money and resources to Britain and its allies. This created jobs
- The war disrupted the economic growth of the countries that were fighting. By the end of the war America led the world in the production of steel, rubber etc.
- America was the only country that did not have wartime debt
How did the republican government contribute to the economic boom?
- The Fordney Tariff made foreign goods expensive. As a result, Americans bought more US made goods and this created more jobs (businesses were left alone to create wealth- Laissez faire)
- Cut taxes so that the Rich could open more businesses, creating jobs
- Taxes were low so that people had -more money to spend
How did mass production contribute to the economic boom?
- Car making used a lot of steel, rubber and glass. More jobs were created in these industries as more cars were made
- Many US businesses were able to produce goods quicker and the price of these products fell. More people could afford them
How did Hire purchase plans contribute to the economic boom?
- Newspapers and magazines urged people to buy the latest gadgets. This led to a boost in sales
- Buying was easy and goods could be delivered to your door
- Hire purchase plans meant that buyers could pay for goods in small instalments
What was the impact of the boom in the motor industry?
- There were jobs building roads, highways and oil refineries to supply the fuel.
- Car owners who live far can drive into -work, however the large influx of cars led to traffic jams, accidents and pollution
Was there an increase in people who used the stock market?
- Yes. During the 1920’s, millions of Americans bought shares in all sorts of companies and made money from selling them on.
- In 1920, there were 4 million people who owned a share. By 1929, it was 20 million.
- Many people borrowed money from the bank and paid them back using the profits when the shares were sold. This was known as ‘buying on the margin’
Inequalities of wealth in the 1920’s
- The richest 5% earned 33% of the all the money
- 15,000 millionaires in 1927, but there were 6 million families with an annual income of $1000 (couldn’t afford necessities such as food and housing)
-Businesses kept their profits high by
paying their workers low wages
How did farmers suffer in the 1920’s?
- After WW1, less demand in Europe for US products
- Some countries taxed US products making them difficult to export overseas
- High tech farming tools caused more food to be produced, prices fell and farmers became poorer
- Forced to sell their farms as they could not pay back their loans (Borrowed money to pay for the high tech machinery)
How did traditional industries (coal and cotton) suffer in the 1920’s?
- Coal miners suffered because coal mines closed. Other forms of fuel (electricity and oil) were used to power homes
- Cotton and wool factories suffered as there were less demand for their products because of the rise of man made cloths. Many factories closed down.
How did African-American workers suffer during the 1920’s?
- Many worked on farms as labourers or were sharecroppers who rented small areas of land from a farmer.
- The farming industry suffered in general and made the poor African Americans even poorer. Many moved to the cities but could only find low paying jobs.
How did American Indians suffer during 1920’s?
- Large amounts of their land was seized by mining companies and their way of life was lost.
- Forced to move to reservations and the soil was so poor that it was impossible to grow crops there
- Lived in extreme poverty, were poorly educated and had the lowest life expectancy than any other ethic group in America.
