DEPTH: 1 How far did the US economy boom in the 1920s?

Question 1

On what 9 factors was America’s economic boom in the 1920s based?

Answer 1

1. Established industries and resources
2. US trade emerged stronger from WWI
3. Invention and Innovation
4. Electrification
5. Mass Production
6. The Motor Industry
7. Mass-marketing
8. Hire Purchase
9. Government Policy

Question 2

What were the laissez-faire policies followed by Republican governments?

Answer 2

Less government involvement in the economy with policies favourable to business; low taxation, high tariffs, low regulation or government intervention

Question 3

What are tariffs?

Answer 3

Taxes on imports to raise money and protect home industries from foreign competition (such as the 1922 Fordney-McCumber Tariff)

Question 4

Who were the Republican Presidents from 1921-1933?

Answer 4

Warren Harding (1921-3)
Calvin Coolidge (1923-9)
Herbert Hoover (1929-33)

Question 5

What was hire purchase?

Answer 5

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.

Question 6

What new-produced consumer products were mass produced making them more affordable?

Answer 6

Telephones, radios, vacuum cleaners, washing machines, fridges, cars

Question 7

How was mass-marketing used to sell products?

Answer 7

Wartime propagandists became advertising agencies to sell consumer goods through radio, posters, cinema, travelling salesmen, adverts in magazines, newspapers and mail order catalogues

Question 8

How did the purchase of shares encourage the stock market boom?

Answer 8

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.

Question 9

How did the car industry help the economic boom?

Answer 9

• 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

Question 10

What appliances did electrification make affordable?

Answer 10

Fridges, washing machines, vacuum cleaners, radios, telephones

Question 11

What new inventions underpinned the boom?

Answer 11

• Building industry; concrete mixers, pneumatic tools, power shovels
• Communications; automatic switchboards, dial phones, teletype machines
• Chemical industry; rayon, Bakelite plastic, cellophane

Question 12

How many more cars were there in 1929 than 1919?

Answer 12

9 million in 1919 to 26 million in 1929

Question 13

How many radios and telephones were there by 1929?

Answer 13

10 million radios

20 million telephones

Question 14

Which industries prospered during the 1920s boom?

Answer 14

Steel, Oil, Construction, Motor Industry

Question 15

Which industries suffered during the 1920s boom?

Answer 15

Cotton and Wool textiles, Coal, Rail, agriculture

Question 16

What were the three largest motor firms?

Answer 16

Chrysler, Ford and General Motors

Question 17

Where did Henry Ford set up the first moving production line in 1913?

Answer 17

Detroit

Question 18

How many Model T Fords had been sold by 1927?

Answer 18

15 million

Question 19

Why did American agriculture boom during WWI?

Answer 19

Midwestern and Southern states exported grain to Europe, used new machinery such as combine harvesters, production increased, prices rose

Question 20

Why did American agriculture suffer during the 1920s boom?

Answer 20

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

Question 21

Why was the 1920s slump in agriculture so bad for the US economy?

Answer 21

Employed >1/4 of the working population

½ the population lived in rural areas

Question 22

What percentage of Americans were living below the poverty line during the boom?

Answer 22

Up to 60%

Question 23

What percentage of Americans were unemployed throughout the 1920s?

Answer 23

Around 5%

Question 24

What is a sharecropper?

Answer 24

An agricultural worker who passes on a share of their crop to the landowner in return for land to farm

Question 25

What groups did not benefit from the boom?

Answer 25

• Unemployed and low waged
• Black Americans
• Native Americans
• New immigrants

Question 26

What percentage of income went to the richest 5% and the poorest 42%?

Answer 26

The richest 5% got 32% of income; The poorest 42% only got 10%