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America > Boom And Crash 1920-29 > Flashcards

Boom And Crash 1920-29 Flashcards

1
Q

How did gnp rise from 1920-29

A

1920 - $73.3 billion
1929 - $104.4 billion

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2
Q

What was inflation like 1920-29

A

Never rose above 1%

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3
Q

How did profits increase for business 1923-29

A

Rose by 62%

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4
Q

What have the USA an advantage compared to counties like britain

A

Had a population of 106million in 1920, compared to britains 42 million

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5
Q

Where were America;s vast natural resources

A

-coalfields in areas such as West Virginia
-reserves of oil in areas such as Texas
-large quantities of iron, copper and lead

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6
Q

How did America exploit its natural recourses

A

The USA developed thr most advanced transportation system in the world with an extensive railway network and river system

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7
Q

How else was natural recourses exploited

A

‘Spirit of enterprise’
The ideal of an American dream suggested that anyone, np master how poor initially, through hard work and talent, could become rich.

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8
Q

What did millions of European immigrants provide for America

A

Cheap labour and hard work to lay foundations for the USAs rapid economic advance

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9
Q

How did ford create mass production

A

-ford established a car manufacturing plant in Detroit before WW1
-on the ford assembly line, individual workers learned how to assemble only specific parts of a car
-the assembly line moved at a steady pace, setting the rate of production
-this meant low skilled and semi skilled workers could be employed

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10
Q

How did the assembly line reduce the amount of time it took to produce a ford car

A

1913- took 12.5 hours
BY 1913, took 2 hours 40

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11
Q

How did the number of cars rise 1920-29

A

1920- 8 million
1929- 26million

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12
Q

How did mass production affect finances

A

Higher output and lowered prices

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13
Q

How much did a ford model t cost in 1925

A

$290, well within the reach of the ordinary American

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14
Q

What did Frederick Taylor introduce

A

Time and motion studies of production
-methods of production were analysed so that new, more time efficient ways for manufacturing goods could be adopted to lower costs and higher profits

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15
Q

What impact did the creation of large industrial corporations have

A

Allowed companies to benefit from economies of scale - corporations bought up natural resources and controlled the whole manufacturing process and sales of their products. They could benefit from raw material costs and pass on lower prices to customers

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16
Q

By 1929, how much did large companies control the USA

A

By 1929, just 16 companies controlled 90% of the USA’s electricity supply industry

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17
Q

What did electification stimulate

A

The development of other advances, such as radios, vacuums, toasters

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18
Q

1912-29 , how did the amount of electrical appliances change

A

1912- 2.4 million
1929, 160 million

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19
Q

What was the downside to electrication

A

It was centred on towns and cities and by 1929, much of rural America was still without electricity

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20
Q

What was the first major radio station

A

KDKA in Pittsburgh, became a model for radio stations across the USA

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21
Q

How did advertisement advance

A

Popular radio shows were sponsored by corporations advertising their goods

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22
Q

By the mid 1930s how many households owned a radio

A

%75

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23
Q

What did the car allow for us workers

A

To live further away from work, stimulating the growth of suburbs around towns and cities

24
Q

How did cars improve holidaying

A

Seaside resorts such as Atlantic city grew rapidly as the destination for New Yorkers and national parks now became more accessible

25
Q

What did the 1921 federal highways act do

A

Gave the government responsibility of building roads
1920-29, overall length of surfaced roads increased from 350,000 miles to 662,000 miles

26
Q

How many cars did ford produce in 1920

A

1.25 million , one every minute

27
Q

How did cars improve employment

A

Hundreds of thousands of people employed in car manufacture in companies such as ford, General Motors and Chrysler

28
Q

How many did the car industry directly employ

A

375,000

29
Q

By 1929, what perfect of thr workforce was employed in car industry

A

7%

30
Q

What other industries did car manufacturing stimulate

A

Steel,rubber and glass

31
Q

What did car ownership lead to the increase of

A

Demand of petrol , stimulating the oil industry and garages

32
Q

How myuch did real wages rise 1920-29

A

13%

33
Q

What did hire purchase schemes do

A

Allowed customers to buy goods by initially paying a small portion of the price and then paying off the rest in monthly instalments

34
Q

What percentage of cars were bought by hire purchase

A

75%

35
Q

What belief stimulated economic growth

A

The belief that the economic boom would be never ending

36
Q

Which party dominated politics and congress in the 20s

A

Republican

37
Q

What did Calvin Coolidge claim

A

Business of America is business
Believed in laissez faire economic policies which aimed to reduce taxes and government regulation of businesses

38
Q

What was the 1922 fordney mcumber tariff

A

Placed taxes on foreign goods imported into the us such as chemicals, textiles and farm products
Increased the profits of the American chemical, dye, steel and aluminium industries
However, it did nothing to deal with overproduction and led to a fall in farm product prices

39
Q

What did Andrew melon do

A

Adopted a low tax policy
Taxes on the rich were lowered by 50% to 20% in a series of revenue acts from 1921 to 1926
For instance, the 1926 revenue act lowered the tax right for high earners, but also lowered tax on the transfer of property and repealed the gift tax
Mellon handed out 3.5 billion in tax reductions and supported a reduction in public spending and balanced the federal budget for part of his time
Under Coolidge, the federal government actually operated on a surplus

40
Q

What did the federal trade commission and republican run state governments do

A

Reduced regulations on business
Price fixing by businesses to raise profits was often ignored by the federal trade commission
Little attempt was made to regulate hours of work or the use of child labour and wage rates were kept low, all of which favoured business

41
Q

To do with trade unions, what did federal government do during the First World War

A

Had protected the rights of workers to join trade unions, by the wars end trade union membership had risen to 4 million
Once government controls were lifted,, many employers became part of the American plan, a slogan for reducing union power
No strike and no union agreements were forced on workers
By 1929, trade union membership had declined by nearly a million

42
Q

How did farmers fare after their boom in the war

A

European agriculture began to recover and demand for us food exports dropped and so did agricultural prices in the USA

43
Q

How was agriculture affected by technological developments

A

The combine harvester increased productivity in cereal production but also led to an increase in unemployment among farm workers
By 1929, more Americans lived in urban rather than rural areas for the first time
In south eastern USA in the 1920s, cotton was affected n by the appearance of of the boil weevil, which caused serious damage to cotton plants

44
Q

Why did attempts to help farmers fail

A

The mcnary haugen bill attempted to stabilise agricultural prices with government buying surplus produce however it failed in congress dominated by laissex faire policies

45
Q

Why did black Americans fare badly in the boom

A

Majority still lived in south eastern USA and suffered legal and social discrimination
Sharecropping involved poor farmers buying seed and renting land from a large landowner. If the harvest was poor they suffered economically. Black Americans in urban ares were given the most menial and low paid jobs such as clerks

46
Q

Where did black Americans migrate to

A

Nearly a million left the poverty stricken south east hobs for jobs in the prosperous northern idustrial cities such as Detroit, New York and Chicago
By 1929, black Americans were engaged in manufacturing employment in large numbers for the first time

47
Q

How much has share value decreased by the end of rhe day on 29 October 1929

A

Almost $4billion

48
Q

Severe economic slump followed the WSC but was not the result of it. What happened?

A

-October to December, unemployed rose fro 500,000 to 4 million as the share value of companies began to fall and banks that had shares in companies began to close down

49
Q

How did the WSC affect economy

A

-average wages fell 16% 1929-31
-the gnp fell 29% between 1929 and 1933
-by 1932, the steel industry was operating at 12% capacity

50
Q

What happened as a result of low tax polices of the republican government

A

-rich became richer , who owned 30% of the nations wealth by1929
-the bottom 40% of the population owned only 12.5% of the nations wealth
-us economy lacked the spending power to buy all goods produced, led to overproduction

51
Q

How was economy affected by Russia

A

-potential markets were lost by Russia, the worlds first communist state

52
Q

Why was the economic boom of the 20s unsustainable

A

-the disparity of wealth between the very rich and the bottom third of the us population
-too many goods were produced in an economy that lacked spending power to purchase them

53
Q

Why did many want to live in Florida

A

-super rich industrialists such as the du pont family saw the possibility of of buying land in Florida and selling it to newly prosperous populations who faced cold winters
-the growth of the car made Florida more accessible
-between 1920 and 1925, miamis population grew from 30,000 to 130,000

54
Q

By 1926, why had Florida land boom collapsed

A

-lack of infrastructure
-swindlers, like the unscrupulous speculator who sold land in the non existent town of nettie, gave the land boom a very bad name
-in 1925, the Internal Revenue Service began taxing profits on property speculation which reduced confidence
-September 1926, a major hurricane devastated large parts of southern Florida

55
Q

What is a bull market

A

-period where prices go up

56
Q

How did the bull market affect shares

A

-share value 1925-29, rose from 34 billion to 64 billion
-the idea that the ordinary American could get rich quick through buying shares
-by 1929, many were buying shares on the margin, they would borrow money and buy shares at ten percent of the share price, hoped to pay the loan back through selling shares higher price in the future
-once the share prices began to fall (bear market) speculation in share prices began to unravel

America (2 decks)

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