Causes of the Boom

Question 1

First World War

Answer 1

Damaged many European countries but had little effect on America domestically.
This meant that everyone looked to trade with America, which established strong trade links.

Question 2

Technology

Answer 2

Electricity consumption doubled in the 1920s, helping the development of fridges, vacuum cleaners. Automatic switchboards, conveyor belts, concrete mixers all make production faster and cheaper. The USA’s chemical industry developed, new fertilisers, dyes were exported to Europe.

Question 3

Immigration

Answer 3

Between 1860-1890, 10 million immigrants came to America. First waves of immigrants come from Germany, Scandinavia, Ireland and Scotland. Germans and Scandinavians tended to settle in rural areas.

Question 4

Mass Production

Answer 4

Goods are produced quicker, and more goods can be produced, making them cheaper. It also makes production cheaper, because of the ‘assembly line’, which means that you don’t require high-skilled workers.

Question 5

Credit

Answer 5

Credit firms also extend to individuals so that people could buy consumer goods before they had the money to pay for them. Expansion of credit firms allow new businesses to grow because of a ready source of capital.

Question 6

Marketing

Answer 6

The 1920s catalogue shopping expands, Sears is an early example of this. 1928 ⅓ of Americans bought goods from Sears.

Question 7

Republican Policy

Answer 7

Laissez-faire policy of republican presidents reduced intervention from the government in business. Tax cuts were introduced. Fordney-McCumber Tariff Act 1922: increased the taxes on importing foreign goods into America, making all foreign goods more expensive and reduced the competition from imported goods. This led to other countries putting tariffs on American goods, this means that American businessmen could not export their products abroad.