Credit, Business & Advertising of the 1920s Flashcards
how much easy credit was financed by 1929?
$7billion
% of cars sold on credit / hire-purchase
75%
% of electrical goods sold on credit / hire-purchase
50%
X2 companies who set up organisations to promote instalment buying (hire-purchase)
Name of GM”s hire purchase company
GM and Ford
General Motors Acceptance Corporation
What were business methods and profits aided by?
government policies which were in favour of large corporations e.g tax cuts, actions against unions etc.
Number of mergers during 1920s was times what than previously?
X3
mergers are a form of what integration?
horizontal
How many corporations possessed 20% of all US wealth in 1929
top 200
The top 200 corporations possessed what % of wealth generated by businesses in 1929?
20%
What was the nature of ‘holding companies’, give an example of one
firms ‘competing’ against each other were really one and the same
e.g US steel
What film was mass production and the monotonous conveyor system satirised in? What did this process do to labour?
Charlie Chaplin’s “Modern Times”
took initiative out of labor
What was advertising essential to creating?
constant demand
What did the Kansas Journal say about the importance of advertising and mass production?
“advertising and mass production are the twin cylinders that keep the motor of modern business in motion”
What did the Kansas journal suggest about the relationship between advertising and mass production?
the fact that they were ‘twin cylinders’ suggests one cannot function effectively without the other
How were radio costs covered?
via advertising
What was the audience during the Dempsey-Tunney fight on the radio?
50million
What sparked some of the mass production of radios?
1920 presidential election results announced via radio
What was the purchasing of stocks using credit referred to as
buying ‘on margin’
What was the Florida Land Boom in part stimulated by?
motor car industry meaning undeveloped area now accessible to middle class
What did the population of Florida rise by between 1920-25?
250,000
When did demand tail off in the Florida Land Boom?
1926
Example of notorious speculation on the stock market;
Radio Corporation of America goes from 85 to 420 points in 1928 - without paying any dividends
By 1929 how many individual investors were there on the stock market?
9million
How many had radios in 1920?
How many by 1929?
60,000
10million
What type of store was appearing on the landscape in the 1920s?
Name one
What % of sales were made at department stores
department stores
JC Penny / Wallgreens
8%
How many films was Hollywood making a year?
1,000
Non-Farm Residential Mortgage Debt;
- 1920
- 1930
1920 - $9billion
1930 - $30billin
% of gross domestic private investment that went into construction during the 1920s;
Growth in construction between 1921-25;
60% of gross domestic private investment
construction X2 between 1921-25
Fall from 1926 peak in construction;
1929 -
1932 -
1929 - dropped 20%
1932 - dropped 82%
What happened to the rediscount rate;
1927 -
1928 -
1929 -
1927 : 4% to 3.5%
1928 : 3.5% to 1.5%
1929 : increased
What was unique about credit compared to government policies in helping to perpetuate the boom?
Gov policies helped big businesses, rather than directly helping the consumer with purchasing power
Credit changed the environment to one of greater confidence and power for the consumer
Benefit of credit in producing a boom across several industries;
versatility of credit
stimulation of not just material goods, but stock market, construction etc.
Duration of Florida Land Boom
What did population increase by?
1921-26
250,000 population increase
Stocks sold;
1927:
1928:
1929:
What was the average downpayment for buying on the margin?
Example of mass speculation leading to inflated stock value;
What were the bluechip stocks increasing by annually?
1927 : 450,000
1928 : 577,000
1929 : 1.1billion
Average downpayment : only 10%
Radio Corporation America :
85 –> 420 in 1928 alone
Safest (bluechip) increasing 16.5% p.a
What did lowering the rediscount rates allow the Fed to do?
What did this do for consumers?
maintain the buoyancy of markets
meant that consumers maintained the confidence to finance their consumerism via going into debt
Schunn’s quote on speculation;
“wasn’t gambling…it was an investment in the glorious American future”
How many Hollywood tickets were sold weekly?
What did this mean for advertising?
95million Hollywood tickets weekly
meant mass audience for advertising
When was the first mail order catalogue?
What was it called?
What did it allow for?
1921
Sears-Roebuck
allowed women at home to purchase goods conveniently and quickly - so more trade
What type of sales techniques were developed in the 1920s x2
- Bruce Barton
- Travelling salesmen
Sign that the KKK recognised that spending had to be encouraged via advertising
Hired X2 publicists
profits from Indiana = $4.4billion in 1 single year
Example of advertisements appealing to women X2
- Chesterfield Cigarettes 1926 first cigarette advert with female
- Sunbeam Vacuum : advertised that it would save 52hours annually of housework
Sales of electrical goods increase:
1918
1928
1918 : 2.6million
1928 : 160million
Get Rich Quick Schemes advertising showed those who made mass profits on stock market, including;
Ponzi Scheme :
promised 50% profit in 90days
What was the role of advertising?
How did advertising evolve over the 1920s?
Role of advertising was to stimulate and direct consumption
Its role was to make spending more attractive, faster and easier
Over 1920s advertising became increasingly pervasive and diversified its methods
What was the act which banned interstate banking in most states?
When did it come into effect?
What happened to branch banking and the Act during the New Deal? Why?
McFadden Act
1927
Legal restrictions on branch banking remained on into the New Deal - people feared the increasing concentration of wealth
Figure on magazines and their circulation in the 1920s
10 magazines had a circulation of 2.5million in early 1920s
