Boom And Crash 1920-29 Flashcards
How did gnp rise from 1920-29
1920 - $73.3 billion
1929 - $104.4 billion
What was inflation like 1920-29
Never rose above 1%
How did profits increase for business 1923-29
Rose by 62%
What have the USA an advantage compared to counties like britain
Had a population of 106million in 1920, compared to britains 42 million
Where were America;s vast natural resources
-coalfields in areas such as West Virginia
-reserves of oil in areas such as Texas
-large quantities of iron, copper and lead
How did America exploit its natural recourses
The USA developed thr most advanced transportation system in the world with an extensive railway network and river system
How else was natural recourses exploited
‘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.
What did millions of European immigrants provide for America
Cheap labour and hard work to lay foundations for the USAs rapid economic advance
How did ford create mass production
-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
How did the assembly line reduce the amount of time it took to produce a ford car
1913- took 12.5 hours
BY 1913, took 2 hours 40
How did the number of cars rise 1920-29
1920- 8 million
1929- 26million
How did mass production affect finances
Higher output and lowered prices
How much did a ford model t cost in 1925
$290, well within the reach of the ordinary American
What did Frederick Taylor introduce
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
What impact did the creation of large industrial corporations have
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
By 1929, how much did large companies control the USA
By 1929, just 16 companies controlled 90% of the USA’s electricity supply industry
What did electification stimulate
The development of other advances, such as radios, vacuums, toasters
1912-29 , how did the amount of electrical appliances change
1912- 2.4 million
1929, 160 million
What was the downside to electrication
It was centred on towns and cities and by 1929, much of rural America was still without electricity
What was the first major radio station
KDKA in Pittsburgh, became a model for radio stations across the USA
How did advertisement advance
Popular radio shows were sponsored by corporations advertising their goods
By the mid 1930s how many households owned a radio
%75
What did the car allow for us workers
To live further away from work, stimulating the growth of suburbs around towns and cities
How did cars improve holidaying
Seaside resorts such as Atlantic city grew rapidly as the destination for New Yorkers and national parks now became more accessible
What did the 1921 federal highways act do
Gave the government responsibility of building roads
1920-29, overall length of surfaced roads increased from 350,000 miles to 662,000 miles
How many cars did ford produce in 1920
1.25 million , one every minute
How did cars improve employment
Hundreds of thousands of people employed in car manufacture in companies such as ford, General Motors and Chrysler
How many did the car industry directly employ
375,000
By 1929, what perfect of thr workforce was employed in car industry
7%
What other industries did car manufacturing stimulate
Steel,rubber and glass
What did car ownership lead to the increase of
Demand of petrol , stimulating the oil industry and garages
How myuch did real wages rise 1920-29
13%
What did hire purchase schemes do
Allowed customers to buy goods by initially paying a small portion of the price and then paying off the rest in monthly instalments
What percentage of cars were bought by hire purchase
75%
What belief stimulated economic growth
The belief that the economic boom would be never ending
Which party dominated politics and congress in the 20s
Republican
What did Calvin Coolidge claim
Business of America is business
Believed in laissez faire economic policies which aimed to reduce taxes and government regulation of businesses
What was the 1922 fordney mcumber tariff
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
What did Andrew melon do
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
What did the federal trade commission and republican run state governments do
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
To do with trade unions, what did federal government do during the First World War
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
How did farmers fare after their boom in the war
European agriculture began to recover and demand for us food exports dropped and so did agricultural prices in the USA
How was agriculture affected by technological developments
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
Why did attempts to help farmers fail
The mcnary haugen bill attempted to stabilise agricultural prices with government buying surplus produce however it failed in congress dominated by laissex faire policies
Why did black Americans fare badly in the boom
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
Where did black Americans migrate to
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
How much has share value decreased by the end of rhe day on 29 October 1929
Almost $4billion
Severe economic slump followed the WSC but was not the result of it. What happened?
-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
How did the WSC affect economy
-average wages fell 16% 1929-31
-the gnp fell 29% between 1929 and 1933
-by 1932, the steel industry was operating at 12% capacity
What happened as a result of low tax polices of the republican government
-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
How was economy affected by Russia
-potential markets were lost by Russia, the worlds first communist state
Why was the economic boom of the 20s unsustainable
-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
Why did many want to live in Florida
-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
By 1926, why had Florida land boom collapsed
-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
What is a bull market
-period where prices go up
How did the bull market affect shares
-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
