The USA in the 1920s: prosperity? Flashcards
What was the highest percentage unemployment in the years 1922-1929?
3.7%
What was the highest inflation rate in the years 1922-1929?
1%
How did the average weekly working hours change in the years 1920-1929?
44 hours in 1929 compared with 47 in 1920.
How did the real wages of industrial workers change in the years 1914-1929?
The real wages rose by 14%.
Compare US industrial worker wages to those in Europe.
US wages were twice or three times higher than those in Europe.
By how much did production of industrial goods rise between 1922 and 1929?
50%
Compare GNP in 1920 and 1929.
$73 billion in 1920 and $104 billion in 1929.
By how much did electricity consumption rise between 1922 and 1929?
It doubled.
How many $ worth of radios were sold in 1929?
$852 million
Define: recession
Downturn in the economy.
Define: real wages
The value of wages in terms of how much they will actually buy.
Define: GNP
Gross national product. The total value of goods and services produced in a country.
How many cinema tickets were bought each week by 1929?
80 million
What were the main products that became widely available in the 1920s? (6)
- Electricity
- Radio
- Vacuum cleaners
- Washing machines
- Motor cars
- Cinema
What was the prosperity of the 1920s based on?
- Favourable government policies that included high tariffs, tax reductions and a benevolent foreign policy
- Technological advances
- New business methods
- Easy credit
- Advantageous foreign markets
What was the Republican attitude towards the running of the government?
- To let business operate, as far as possible, free of regulation
- Belief in the free market
- Laissez-faire
Define: tariffs
Import and export duties.
Define: free market
A system that allows the economy to run itself with minimal government interference.
Define: laissez-faire
An approach where the government deliberately avoids getting involved in economic planning, thus allowing the free market to operate.
During what period was Calvin Coolidge president?
1923-1928
When was the Fordney-McCumber Act passed?
1922
What was the aim of the Fordney-McCumber Act?
To raise tariffs to cover the difference between domestic and foreign production costs.
What were the effects of the Fordny-McCumber Act? (3)
- In almost every case it became cheaper for American consumers to buy goods produced within the USA than from abroad
- The tariff level made foreign goods more expensive than goods produced in the USA, even when they could be produced in their home countries more cheaply
- This meant that for some products import duties were so high that domestic producers were given an almost guaranteed market
- The level of foreign trade was reduced, while domestic demand for goods remained high.
In what years were federal taxes reduced during the 1920s? (3)
The government reduced federal taxes significantly in 1924, 1926 and 1928.
How many $ of tax were reduced during Mellon’s time in office to large-scale industrialists to large-scale industrialists and corportions?
Mellon handed out tax reductions totalling $3.5 billion.
What was the surplus in which Coolidge’s government operated in 1925?
$677 million
What was the surplus in which Coolidge’s government operated in 1925?
$607 million
Why were federal tax cuts made during the 1920s?
To reduce the national debt.
What was an impact of federal tax cuts in the 1920s?
- Cuts meant little to people who were poor to pay taxes in the first place.
- The tax cuts mostly benefited the wealthy.
Define: national debt
The amount of money owed by the government.
Define: Federal Trade Commission
Body charged to ensure businesses were operating fairly.
Why did the Federal Trade Commission become increasingly unable and unwilling to operate effectively during the 1920s?
Economies in government meant there were fewer regulations and fewer personnel to enforce them.
What did economies in government during the 1920s lead to? (3)
- Businesses were often left unhindered to carry on their affairs as they saw fit
- Laws concerning sharp business practice, such as price fixing, were often ignored
- Where the government did prosecute, the offenders usually won on appeal
Why did President Coolidge want to avoid intervention in foreign affairs? (2)
- Budget cutting
2. A recognition that Americans did not want to see their troops getting caught up in foreign disputes
What did the policy of conciliation lead to?
Helped American investment abroad by removing any ill feeling towards the USA.
Define: price fixing
Where companies agree to fix prices between them, thereby preventing fair competition.
What did technological advances in industrial production make possible during the 1920s?
Huge increases both in the quantity and in the variety of products on sale.
Describe the industrial growth of the motor industry during the 1920s.
- By 1930 there were 23 million cars on the road
- The industry was the biggest in the USA
- It was the largest market for commodities such as steel and rubber
- 65% of workers were working to pay for cars.
What did economies in government during the 1920s lead to? (3)
- Businesses were often left unhindered to carry on their affairs as they saw fit
- Laws concerning sharp business practice, such as price fixing, were often ignored
- Where the government did prosecute, the offenders usually won on appeal
Why did President Coolidge want to avoid intervention in foreign affairs? (2)
- Budget cutting
2. A recognition that Americans did not want to see their troops getting caught up in foreign disputes
What did the policy of conciliation lead to?
Helped American investment abroad by removing any ill feeling towards the USA.
Define: price fixing
Where companies agree to fix prices between them, thereby preventing fair competition.
What did technological advances in industrial production make possible during the 1920s?
Huge increases both in the quantity and in the variety of products on sale.
Describe the industrial growth of the motor industry during the 1920s.
- By 1930 there were 23 million cars on the road
- The industry was the biggest in the USA
- It was the largest market for commodities such as steel and rubber
- 65% of workers were working to pay for cars.
When did Henry Ford introduce his moving assembly line?
1914
What was the impact of the moving assembly line?
It brought the cost of the Model T down from $950 to $500.
How many Model Ts was Henry Ford producing by 1920?
1,250,000 a year
This equated to 1 every 60 seconds.
How much did the Model T cost in 1925?
$290
How many Model Ts were being produced in 1925?
One every 10 seconds
How much did petrol cost in 1925?
Between 20 and 25 cents a gallon
What was the average wage in manufacturing industries in 1925?
50 cents per hour
Where did Henry Ford’s biggest competition come from? (2)
- General Motors
2. Chrysler
How many cars were on the American roads in 1930?
26.5 million
What was the minimum wage that Ford introduced?
$5.00
Define: mass production
Making large numbers of the same item using machinery and conveyor belts
What were the effects of the growth in car ownership?
- By 1929, the motor industry employed 7% of all workers and paid 9% of all wages.
- The temporary closure of Ford was a contributory factor to the recession of 1927.
How many miles of road were there in 1920?
3 million miles
What percentage of road was suitable for motor vehicles in 1920?
1%
When was the Federal Highway Act introduced?
1921
What was the purpose of the Federal Highway Act?
Gave responsibility for road building to central government.
At what rate were highways being constructed at by 1929?
10,000 miles per year.
What was the impact of improved transportation? (4)
- Afforded new opportunities for industry
- Goods could be much more easily moved from factories to their markets
- The number of truck registrations increased from less than 1 million in 1919 to 3.5 million by 1929
- In 1929 15 billion gallons of petrol were used and 4.5 million new cars were sold.
How many items of electrical goods were sold in 1912?
2.4 million
How many items of electrical goods were sold in 1929?
160 million
How many fridges were there in America in 1928?
20,000
Define: management science
The application of technological and scientific ideas to running a company successfully - such as time and motion, where the amount of time it should take to complete a process in manufacturing is timed and subsequently monitored. The aim is to use scientifically proven methods to run the company.
What did Firestone produce?
Rubber
What percentage of the nation’s wealth did the 200 largest corporations own by 1929?
20%
What percentage of the wealth generated by business activities did the 200 largest corporations own by 1929?
40%
Define: trusts
Companies that collude to control manufacture, supplies and prices to ensure that other firms cannot compete, thereby guaranteeing profits for themselves.
How did large corporations dominate industry?
- They could operate a cartel to fix prices This could lead to them controlling the entire industrial process.
- Some organisations, for example US Steel, were so huge that they could dictate output and price levels throughout the industry.
What did the industrial process include?
- The exploitation of the raw materials
- The manufacture of the product
- The distribution to wholesale and retail outlets
- The sale to the customer
Define: cartel
Group of companies agreeing to fix output and prices, to reduce competition and maximise their profits. This was usually illegal.
Define: holding companies
Where one huge company would obtain a controlling interest in smaller companies to control the market.
How many cinemas were there in the USA by 1928?
17,000
How much did a cinema ticket cost in 1928?
10 cents
How many radio stations were there throughout the USA by 1929?
618
What was mainly used for advertising in the 1920s?
Cinema and radio.
