Reasons for prosperity 1920s Flashcards
Main reasons for prosperity
- government policy
- high tariffs
- fewer regulations
- foreign policy
- technical advances
- tax reductions
- easy credit
Government policy - reasons for prosperity 1920
Laissez-fair, Calvin colidge and Andrew mellon (treasury secretary) believed in free market, and that money naturally filters down the people. so to increase living standards you should let the rich get richer.
High tariffs - reasons for prosperity 1920
Fordney-McCumber act 1922, covered the cost of the difference between home and foregone products. Through out 20s tariffs prices went up. US huge profits from tariffs.
Tax reductions - reasons for prosperity 1920
reduction in federal tax in 1924, 1926 and 1928. Mainly benefited the wealthy. During Melons 8yrs in office he gave out $3.5billion tax reductions to large scale industries and corporations. But Cooidges govts did act on surplus (money left over once they spent what they needed to) on $677million in 1925. Aimed to reduces national debt.
Fewer regualtions - reasons for prosperity 1920
Koolcedge appointed businessmen as the team who motioned the regulation.
fewer people to enforce the regulations. Federal Trade Commission became unwilling to operate effectively, meaning business could do what they wanted. Laws effecting business were ignored, like price fixing. No laws again child labour or work hours, many weeks were 56hours and wages around 18cent.
Federal trade commission
Body charged to ensure businesses were operating fairly.
Foreign Policies - reasons for prosperity 1920
Coolidge avoided foreign affairs as much as possible. due to budget cutting and not wanting to see american troops get cauht up in foreign affairs.
Technical advances about cars - reasons for prosperity 1920
advancements made that increased both quality and quaintly. Motor vehicle industry, but the end of the decade 23 millions cars were made. 65% of workers worked to buy a car.
Henry Ford - reasons for prosperity 1920
mass production before 1920s. Model T 1908, ford wasn’t the model T to be for all americans, so in 1914 the model T went from $950 to $500 then came down again in 1925 to $ 290. production was now one every 10seconds.
composition was general motors and chrysler, ‘The big three’. 1927 Ford shut down and made the Model A.
Why cars were so important and what the industry did - reasons for prosperity 1920
by 1929 the motor industry employed 7% of workers and gave out 9% of all wages. Goods could now be easily transported from factories to markets.
Roads - reasons for prosperity 1920
Federal highway act 1921 gave responsibility for road building to central govt. and highways were being constructed at a rate of 10,000 miles a year. but it wasn’t enough in 1936 a report was done by Chief Designer in the Bureau modern roads built over the last 20years, say 25-50% of the roads were no longer a good enough standard because the amount of traffic had worn them down. Cars had also introduced service stations.
Electrical consumer goods - reasons for prosperity 1920
mass production lead to production of labour saving products, the vacuum cleaner. 1912 2.4million electrical good were sold. rural america was without electrical goods.
New business methods - reasons for prosperity 1920
growth of huge corporations, of scientific methods of management and advertising, which gained influences previously unimaginable.
Growth of huge corporations - reasons for prosperity 1920
Large corporations, like firestone-rubber, were manufacturing businesses and were able to invest in and exploit the raw materials of the US. By 1929 the bigger 200 corporations had 20% of US wealth and 40% of the wealth was generated by business activity. Largest companies could dominate: cartel to fix prices, they could detriment output and prices throughout the industry.
Management in corporations and development in business - reasons for prosperity 1920
management become complex as companies grew, ford become very old fashion he still tried to manage to whole company. Growth in business school: 1928 there were 89 .
New scientific management theories were put into places, particularly the ‘TIME AND MOTION’ work of W.Talyor, leaves of production increased.
Advertising and salesmanship - reasons for prosperity 1920
Cinema:
Radio:
Mass media, cinema, radio brought a revolutions to advertising.
Cinema: 1928 there were 170 cinemas, 10 cent tickets. cinema guesser coped the appearance of the starts (consumer society, fashions matters.)
Radio: began when a KDKA station in Pittsburgh announced the results of the 1920 presidential election. Radios began mass production in1920, by 1929 there were 618 radio stations. Most of them were controlled by two companies, the National broadcasting company and columbia broadcasting system. estimated 50 million people listen to live commentary of 1927 Dempsey-Tunney fight.
1922 the New York radio station WEAF began an important trend when broadcasting the first sponsored programme. Then programmes began to cater to the appeal.
The constant need to crate demand - reasons for prosperity 1920
The growth in the market needed a continuous market. it was no longer enough just to sell the model T, the boom need new thing frequently for people to buy.
Advertising become the decider between huge profit or low profit, having to differ your product from others.
High profit salesmen- Bruce Barton, who tried to convince people that consumer society and wealth went in hand the christian teachings, wrote a serious a books.
Easy credit - reasons for prosperity 1920
1929 almost $7 billion worth of good were sold on credits- 75% of cars. Companies swell as individuals, almost everyone was in debt. It was assumed that everyone had good credit.
Relationships the US had with foreign economies - reasons for prosperity 1920
As well as high tariffs, Businessmen were encourage to create link abroad, particularly in raw matrices that help technology growth development. Oil was bought from abroad, including Canada. The united fruit company had a larger budget in costa rica than the govern to costa rica. US exported vast amount of manufactured products. US dominated Canadian market, the electric industry was nominated by a US firm. USSR was dependent on the US for the first 5 year plan, 33% of all exported Fords tractors went to Russia. 85% of all tractors in Russia were Ford.
Private investments went from $7000billion in 1919, to $17200 in 1930.
Federal high way act
1921
Time and motion
W Taylor
Fordney-McCumber act
1922 creating tariffs
Bruce Barton
High profit salesmen- Bruce Barton, who tried to convince people that consumer society and wealth went in hand the christian teachings, wrote a serious a books.
Fords factory was where and called ?
River rough in Detroit
Fords workers were payed?
$5 an hour
Tax cuts : name an act?
The revenue act
Price fixing was done by what companies?
Chrysler
General Motors
Fords
The united fruit company
The united fruit company had a larger budget in costa rica than the govern to costa rica.
New York radio station
1922 the New York radio station WEAF began an important trend when broadcasting the first sponsored programme.
WW1 role in the economic boom
Now demand for US goods, therefore production increased between 1916 and 1918 by 39%.
civilian workforce grew by 1.3million. Unemployment was low at 5%.
Farmer increased there exports by 300%.
byt 1919, USA overseas investments stood at $10 billion.
