Reasons for the boom 1920-1929 (T1) Flashcards
How did industrial production modernise to enable increased production?
- New technologies
- Production line
How much did the average wage rise to during the 1920s?
To $1760 per year
up 14%
Where in America did not have universal use of electricity?
The southern states
Name two reasons for the consumer boom.
People working less hours a week = more free time to buy items
People were on higher wages and could purchase things on hire purchase
How many cars were on the road by the end of the 1920s?
27 million
What % of the workforce were employed in the automobile industry?
7%
What other industries benefited from the automobile industry?
Glass, rubber, steel, road building
How did the government make car travel easier?
Federal highways act 1921
By 1929, what % of cars were bought on hire purchase?
75%
What was management science and how did it change business?
Delegating roles and creating a board of leaders
It meant that the owner of the company didn’t have to do every role (e.g. finance, marketing etc) the roles were delegated to individual employees allowing businesses to grow bigger
What happened if you failed on a monthly hire purchase payment?
The product bought on hire purchase would be repossessed
How did Americans enjoy better standards of living during the boom?
Hire purchase
Higher wages
Less hours
Cars for holiday
What were huge corporations?
Businesses that own a higher % of the market
Who were the presidents during the 1920s?
Harding 1921-1923
Coolidge 1923-1929
Hoover 1929-1933
Who was the secretary to the treasury?
Andrew Mellon 1921-1932
Economic boom
The time where the economy of a country is growing and making more money.
What were unemployment rates like at the time?
Never rose above 3.7%
What happened to the wages of industrial workers?
Raised by 14% between 1914-1929
Were in average 2 or 3 times higher than wages in Europe
What happened the the production of industrial goods?
They rose by 50% between 1922-1929
What two developments in the early 20th century helped mass production?
Wider scale introduction of electricity
The assembly line
What products began to be mass produced for the first time?
Clothing after sizes were standardised
Automobiles - pioneered by Henry ford
Compare the number of automobiles on the road in 1920 to 1929.
In 1920 there were 7.5 million
In 1929 there were 27 million, approx 1 for every 5 people
What % of workers, and wages, were employed by the motor vehicle industry.
7% of workers
9% of wages
By 1924 what % of the vehicle market did Ford control?
50%
What other industries benefited from the boom in automobiles?
Road building, rubber, petrol, glass, motels, car salesrooms
Why was there an overproduction in labour saving devices?
By the end of the 1920s, everyone that could afford the labour saving devices such as hoovers and washing machines had purchased them. Much of rural America had no electricity and could not afford them.
What impact did technological devices have on leisure?
Motor vehicles meant more travel to national parks and short holidays
Tourism developed as an industry
The radio was a leisure item
People had more free time due to labour saving devices
Movie theatres and cinemas were built
Which political party were the presidents of the 1920s of?
Republicans
Who were the presidents?
Harding 1921-1923
Coolidge 1923-1929
Hoover 1929-1933
What was the general government policy and what did this mean for the market?
Laissez-faire, this meant very little government involvement in policy. The free markets were allowed to operate with very little restrictions
What did the Fordney McCumber act 1922 do?
What did this mean for the market?
It raised the tariffs on imported goods by 50% meaning foreign goods were more expensive to buy the domestic goods. This meant American producers sold more of their goods
How did the federal tax cuts impact the population?
The benefited the wealthy who paid less tax. They did not impact the poor who were too poor to pay taxes anyway.
What did the reduction in economic regulations mean for business activity?
Companies would work together to fix prices to prevent fair competition. They could easily exploit workers.
What three ways could huge corporations dominate industry?
- Cartels formed (companies would work together to fix prices, meaning little competition)
- Holding companies were created (a company becomes so big that they own other companies, giving it the power to fix prices and make big profits)
- Small businesses struggle to compete
How were businesses changed by the growth of management science?
- They became more complex to manage therefore businesses run by one manager/ entrepreneur were old fashioned
- More specific management roles were created such as marketing, production, design and accounting
How did advertising change during the 1920s
- Some companies employed psychologists to help them reach target markets ie young women
- Campaigns began to include slogans, brand names and celebrity endorsements
- Consumers began to believe they can’t survive without this product
- The amount spent on advertising increased 5 times from 1914
How did credit work?
Consumers would pay a deposit, and the rest in regular installments
Why is credit so unstable?
Many consumers and businesses ended up with debt that they could not pay back
What % of cars were bought on credit?
75%
What did the government encourage businesses to do when sourcing raw materials?
- Take advantage of the foreign markets
- For example buying oil concessions in countries such as Canada, Iraq and Venezuela
