DEPTH: 1 How far did the US economy boom in the 1920s? Flashcards
On what 9 factors was America’s economic boom in the 1920s based?
- Established industries and resources
- US trade emerged stronger from WWI
- Invention and Innovation
- Electrification
- Mass Production
- The Motor Industry
- Mass-marketing
- Hire Purchase
- Government Policy
What were the laissez-faire policies followed by Republican governments?
Less government involvement in the economy with policies favourable to business; low taxation, high tariffs, low regulation or government intervention
What are tariffs?
Taxes on imports to raise money and protect home industries from foreign competition (such as the 1922 Fordney-McCumber Tariff)
Who were the Republican Presidents from 1921-1933?
Warren Harding (1921-3) Calvin Coolidge (1923-9) Herbert Hoover (1929-33)
What was hire purchase?
Customers who couldn’t afford a product outright could pay by instalments. 8 out of 10 radios and 6 out of 10 cars were bought on credit.
What new-produced consumer products were mass produced making them more affordable?
Telephones, radios, vacuum cleaners, washing machines, fridges, cars
How was mass-marketing used to sell products?
Wartime propagandists became advertising agencies to sell consumer goods through radio, posters, cinema, travelling salesmen, adverts in magazines, newspapers and mail order catalogues
How did the purchase of shares encourage the stock market boom?
Many bought shares in companies and gained dividends (a percentage of the profits). Demand increased the price of shares and provided companies investment to expand.
How did the car industry help the economic boom?
- employed up to half a million workers paying good wages
- stimulated road construction (biggest employer in 1920s), hotels, gas stations, advertising billboards, suburb development and holiday resorts
- Boosted associated industries; oil, glass (75% of US production), rubber, steel, leather
What appliances did electrification make affordable?
Fridges, washing machines, vacuum cleaners, radios, telephones
What new inventions underpinned the boom?
- Building industry; concrete mixers, pneumatic tools, power shovels
- Communications; automatic switchboards, dial phones, teletype machines
- Chemical industry; rayon, Bakelite plastic, cellophane
How many more cars were there in 1929 than 1919?
9 million in 1919 to 26 million in 1929
How many radios and telephones were there by 1929?
10 million radios
20 million telephones
Which industries prospered during the 1920s boom?
Steel, Oil, Construction, Motor Industry
Which industries suffered during the 1920s boom?
Cotton and Wool textiles, Coal, Rail, agriculture
What were the three largest motor firms?
Chrysler, Ford and General Motors
Where did Henry Ford set up the first moving production line in 1913?
Detroit
How many Model T Fords had been sold by 1927?
15 million
Why did American agriculture boom during WWI?
Midwestern and Southern states exported grain to Europe, used new machinery such as combine harvesters, production increased, prices rose
Why did American agriculture suffer during the 1920s boom?
Overproduction;
- Demobilisation in Europe returned workers to their farms and US imports were no longer needed
- US tariffs made selling in Europe difficult
- Competition from Canada and Argentina
- A more prosperous US preferred fresh fruit and veg to grain
- Prohibition lowered consumption of barley
Why was the 1920s slump in agriculture so bad for the US economy?
Employed >1/4 of the working population
½ the population lived in rural areas
What percentage of Americans were living below the poverty line during the boom?
Up to 60%
What percentage of Americans were unemployed throughout the 1920s?
Around 5%
What is a sharecropper?
An agricultural worker who passes on a share of their crop to the landowner in return for land to farm
What groups did not benefit from the boom?
- Unemployed and low waged
- Black Americans
- Native Americans
- New immigrants
What percentage of income went to the richest 5% and the poorest 42%?
The richest 5% got 32% of income; The poorest 42% only got 10%
