Chapter 3 - The years of prosperity: 1919-1929 Flashcards

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1
Q

What had changed regarding where people lived after the FWW?

A

First time ever - more living in urban areas.
15% living in cities with more than 0.5 million.
Chicago - 2 million.
NY - 5 million.
1833 - Chicago only had a pop. of 350.

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2
Q

What new features marked the process of urbanization after the FWW?

A

Skyscrapers - especially in NY.
40 Wall Street, Chrysler Building (320m).
Empire State Building (380m).
City centres - lots of migrating south AAs.
1920s - 1200,000 whites left Harlem.
87,000 blacks arrived.
Whites - moving into suburbia.

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3
Q

Why was suburbia spreading?

A
Automobile revolution.
Queens NY City doubled in population.
Quality of suburb amenities improved.
1920-1930:
Inside flush toilets - 20% to 51%.
Central heating - 1% to 42%.
Electric lighting - 35% to 68%.
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4
Q

How did electricity help with the growth of consumer goods?

A

1930 - 86% city homes had electricity.
Consumer goods aided by new materials e.g. Bakelite – first synthetic plastic - patented in 1909.
Vacuum cleaners - 30% families 1930.
Electric washing machines - 24% families 1930.
Electric refrigerators - 8% families 1930.
1929 - radio - 10 million.
Telephones - 20 million.

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5
Q

Did rural America have electricity in the 1930s?

A

Not until 1950s - US had own electricity supply.
Rural costs - too long for supplier profit.
Rural electricity - charged twice as much.
Rural contrasted with urban - used burning stoves, oil lamps and well water.

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6
Q

What sort of stimulants helped the increase of consumption after the FWW?

A

More prominent brand names on products.
Large billboards - attracted motorists.
Magazines e.g. Good Housekeeping Magazine - inspiring US image.
Radio - Pepsodent toothpaste - linked to Amos ‘n’ Andy show in 1928.
1929 - US companies - $3 billion per year advertising.

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7
Q

How did new methods of distribution help the increase of consumption after the FWW?

A

Sears Roebuck mail order catalogue - range of farmer goods to choose from.
Opened its first retail store in Chicago, 1925.
Other stores followed this and opened.
Macy’s expanded during the 1920s.
Introduced its ‘Thanksgiving Day’ parade in 1924 - creative advertising.

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8
Q

What was the most important stimulant in the consumer industry?

A

Consumer credit - began in motor industry.
Motor companies set up finance companies to help sell.
Using credit - able to buy now/pay later.
By putting down a deposit - could be paid in installments.
Great scheme - 60% furniture and 75% radios - bought on hire purchase schemes.

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9
Q

What sort of leisure activities were available in the 1920s?

A

Radios and cinemas.
Magazines - crossword puzzles ‘fads’.
Energetic Black Bottomed Dance named after a district in Detroit.

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10
Q

How was the radio introduced in the 1920s?

A

KDKA - first station to receive a licence - 1920.
1922 - 550 stations broadcasting to 3 million.
Improved quality of transmission and reception.
1922 WEAF station was commercially sponsored - US radio advertising became the norm.
Larger companies started taking over smaller ones:
NBC - created in 1926.
CBS in 1927.
RCA - highest stock holder - founded in 1919.
Rose by 929% between 1925-1929 - lots of profit.

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11
Q

How was the cinema introduced in the 1920s?

A

The Birth of a Nation - 1915 KKK film.
Film director Mille rented a barn in Hollywood for $75 per month - he wrote to his backers (Lasky and Goldwyn) - hoped they’d agree.
Cinema was dominated by Jewish immigrants from Europe.
Fox from Hungary, 3 Warner Brothers from Poland etc.

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12
Q

What was the film industry like in the 1920s?

A

20,000 cinemas.
Roxy Theatre - held 6,200 - largest.
‘Big Five’ - Metro-Goldwyn-Meyer, Paramount Pictures, Fox Film Corporation, Warner Brothers and RKO Pictures.
These owned 90% of the US film industry.

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13
Q

What were the quality of films like in the 1920s?

A

Silent movies - early part of the decade.
Charlie Chaplin and Clara Bow - movie stars.
First ‘talking’ film - The Jazz Singer in 1927 - Al Jolson.

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14
Q

How popular was the cinema in the 1920/1930s?

A

800- 1,000 films being made per year, compared to 500 today.
1930 - 100 million cinema tickets were being sold per week.
People saw more than one film per week.
Helped social divisions.

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15
Q

Who was Henry Ford?

CASE STUDY

A

1903 - opened Detroit factory - turned 2,000 cars a year.
2 men per car.
Backers pulled out - Ford bought significant shares to have majority control.
Reduced the production of expensive cars.
Developed cheaper model - Model T.
10,000 were sold.
1910 - transferred production to a new plant.

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16
Q

Why was the Model T so popular?

A

Took 1.5 hours compared to 14 hours to produce a car.
Dropped from $850 to $360 by 1916.
1925 - 9,000 cars produced per day.
Ford was prepared to forgo some of his profits per car to increase demand.

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17
Q

What was Ford’s workforce like?

A

High turnover - repetitive and not well paid.
1914 - Ford doubled wages - didn’t have to spend money training new workers.
High wages/yellow dog contracts prevented unionisation - could’ve challenged authority.

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18
Q

How successful was Henry Ford?

A

1916 - $60 million (doubled from 1914).
1921 - Ford produced 60% US cars.
Peak year 1924 - 1.6 million Model T cars sold.
Model A also made.
Closed Detroit factory in 1927 and opened River Rouge.
Wanted to own all the raw car materials and transport systems needed to carry them onsite.
1930s - 100,000+ were employed at the 2,000 acre site.

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19
Q

What was Henry Ford’s attitude towards the workforce?

A

To some - considerate employer.
To others - unreasonable.
Ford factories - spotlessly clean, superb safety record and nourished workers.
BUT reports of violence - 1932, they crushed a Communist demonstration, 4 shot dead.

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20
Q

What were the POSITIVE economic impacts of cars?

A

1929 - 27 million cars on the road.

  1. Other industries were involved in car making: rubber - 80%, plate glass - 75%, steel - 15%.
  2. Stimulated fuel stations.
  3. Roads needed to be built - 650,000 miles by 1929.
  4. Routes needed restaurants/hostels.
  5. 1929 - 10% workforce were car related - jobs.
  6. Encouraged consumer credit.
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21
Q

What were the NEGATIVE economic impacts of cars? 2

A
  1. Agriculture suffered.

2. Fewer transport horses - services reduced.

22
Q

What were the social impacts of cars? 3

A
  1. Easier travel - rural/urban lines broke down.
  2. More leisure time.
  3. Increased suburb growth.
23
Q

Who stood as symbols of innovation/success in the 1920s?

A

Clarence Birdseye - refrigeration.
Sam Goldwyn - film industry.
Samuel Insull - electricity.

24
Q

Who was Warren Harding?

A

President from 1921-1923.
Appointed outstanding individuals to Cabinet e.g. Hudghes, Mellon and Hoover.
BUT also appointed friends e.g. Daugherty, Fall and Forbes.
Daugherty - accused of taking bribes from bootleggers.
Fall - Teapot Dome Scandal.
Forbes - jailed for 2 years for defrauding the government

25
Q

Who was Calvin Coolidge?

A

Harding’s VP - became president from 1923-1928.
Democrats were also divided - Coolidge won easily,
Wanted to tackle the economy.

26
Q

What did Harding and Coolidge do in order to keep business interests?

A

Limiting taxation and foreign policy.
Supported League of Nations rejection and a return to isolationism.
Laissez faire.
BUT Republicans accepted government assistance through tariffs/controlling immigration.

27
Q

What was taxation like after the FWW?

A

Mellon (Secretary of the Treasury) wanted tax reduction to achieve economic growth,
Took 3 cuts - aim achieved in 1925.
However the government income actually increased due to prosperity - the war debt was reduced.

28
Q

What taxation act did Harding pass?

A

1921 Budgeting and Accounting Act.
Bureau of the Budget established.
The President had to submit to Congress an estimate of federal income and expenditure annually.

29
Q

What was the Democrats’ view on tariffs and what did this mean?

A

Believed free trade value.

Lower tariffs - lower consumer prices - but could leave US industries competing with cheaper foreign products.

30
Q

WHEN was the first tariff act introduced?

A

Emergency Tariff Act in 1921.
Protectionism ideas.
First introduced with Democrat Wilson - but he vetoed it.
Passed when Republican Harding took control.

31
Q

What did the first tariff act include?

A

Taxes on a range of imported agricultural products e.g. wheat from Canada.

32
Q

What/when was the second tariff act introduced?

A

Fordney-McCumber Act in 1922.

Taxes on industrial products, as well as food imports.

33
Q

Why was the Fordney-McCumber Act controversial?

What was created as a result of this?

A

Included American Valuation Plan.
Proposed tariff would be calculated the US item cost rather than country manufacture cost.
Would’ve increased tariff level.

Even McCumber wasn’t happy.
Compromise - Tariff Commission would advise the President on tariff rates.
President - given 50% tariff power.
There was an increase of 11% on selected products.

34
Q

How did the tariffs have negative consequences?

A

Higher tariffs - more difficult to sell abroad.
Imported product prices rose.
Farmers - net losers - imported equipment costs rose.

35
Q

Were tariffs popular?

A

Only in big business - did ittle to stimulate the boom.

US chemical industry benefited the most - gained protection from foreign competition.

36
Q

Did the FTC and ICC help enforce the tariffs?

A

No - appreciated by the corporations.
Free market acceptance - especially in new industries e.g. broadcasting.
Unlike GB (had BBC to control/manage broadcasting), USA broadcasting was left to private companies.

37
Q

What was the Republican attitude to trade unions?

A

Democrat Wilson - encouraged trade unions.
HOWEVER Republican government - railways handed back to former private owners.
Government biased to companies than unions.
E.g. 1921 coal mining strike - fed. gov used troops to gain order in West Virginia.
1922 - court injunction against pickets in 40,000 railway strike.
Strike ended as union failure.
Many railway companies reverted to non-unionised.

38
Q

What was the Supreme Court attitude towards trade unions?

A

Had a conservative majority.
1921 - Chief Justice William Taft overturned reforms that had improved working conditions.
E.g. ruled that law that had put high taxes on products manufactured by child labour was unconstitutional - matter for the states, not for government.
Ruled minimum wage Act for women workers in Washington DC was constitutional.

39
Q

What happened to the membership of trade unions in the 1920s?

A

1920 - 12% labour force was in a trade union.
1929 - 8%.
Due to ‘carrots’ - Henry Ford’s $5 per day.
‘Sticks’ - yellow dog contract - workers wouldn’t join a union as part of employment conditions.

40
Q

How did the WW1 affect agriculture?

A

Done well in WW1.
Tempted more production with mechanizing and bringing marginal land into production.
BUT prices would fall after WW1 - back to normal.
1919-1921 - farm products halved - $10b to $4b.
Cotton - 35 to 16 cents in 1920.
Corn - $1.50 to $0.52.
Debt and foreclosures - common on mortgaged farms.

41
Q

How did farmers attempt to deal with the agricultural slump after the FWW?

A

Farmers increased production.
BUT it just increased supply.
Then drove prices down even further.

42
Q

What were the 3 names of the farming acts in the 1920s?

A

The Grain Futures Trading Act - 1921.
The Capper-Volstead Act - 1922.
The Intermediate Credit Act - 1923.

43
Q

What did The Grain Futures Trading Act of 1921 do?

A

Attempt to prevent the manipulation of the grain market - believed it was keeping grain prices artificially low.

44
Q

What did the Capper-Volstead Act of 1922 do?

A

Enabled farmers to work together in co-operatives.

Made production and marketing of agricultural products easier.

45
Q

What did the Intermediate Credit Act of 1923 do?

A

Established a credit system to give agricultural loans to farmers on easier terms than were currently available.

46
Q

What was the IDEA of the McNary-Haugen Bill?

A

First introduced in 1924 - AWAY from laissez-faire.
Proposed that fed. gov should sell surplus supplies e.g. corn/wheat abroad at the best achievable price.
Farmers would contribute to the cost through ‘an equalisation fee’.
Idea was that it would result in pre-war prices due to restricted supplies.

47
Q

Was the McNary-Haugen Bill passed?

A

1924 - first proposed.
Some support from Coolidge’s Secretary of Agriculture, Henry Wallace.
Failed to pass Congress in 1924 and 1926.
Broadened to include cotton and tobacco in 1927 - pleased Congress southern members.
Then passed through Congress but vetoed by Coolidge in 1927/28.
Required too much government intervention.
Farmers continued to suffer from falling incomes.

48
Q

Who/what things were the economic winners of the 1920s?

A
Ford, Insull and Birdseye.
Salesmen and estate agents.
Ford's workers - $5 per day.
Ownership of flush toilets and labour saving devices.
Cheaper electricity.
Cinemas and radios.
Cars.
49
Q

Who/what things were the economic losers of the 1920s?

A

Agriculture and over-production.
Rural communities - no electricity.
Poorest South sharecroppers were AAs.

50
Q

Extra prosperity stats?

A

1920 - rayon replaced silk.
Unemployment never rose above 3.2% in 1922-1929.
Inflation never rose higher than 1%.
44 working hours - 1929, compared to 47 hours - 1920.
14% wage increase 1914-1929.
Wages x3 higher than Europe.

51
Q

What was the US GNP in 1920 and 1929?

A

1920 - $73 billion.

1929 - $104 billion.

52
Q

What were the main reasons for prosperity? 6

A
  1. Government policies.
  2. Technical advances.
  3. New business methods.
  4. Easy credit.
  5. Influence in foreign economies.
  6. State of mind - optimism.