Topic 1 - Boom and Crash Flashcards
Changes in industry
Mass production → Moving assembly lines
Henry Ford → 1,250,000 cars made each year
Price of Model T fell from $950 (1914) to $250 (1925)
Changes in advertising
Advertisements targeted specific groups
‘Lucky Strike’ cigarettes targeted young women
Companies spent $3 billion each year
Technological advances 1912-1929
Between 1912 and 1929, the number of electrical goods sold per year rose from 1.4 to 160 million
The automobile
Number of cars → 7.5 to 27 million → led to increased road building
Tax Reductions
1924, 1926 and 1928 tax cuts by the Government
Mellon gave a tax reduction of $3.5bn to large businesses
These favoured the wealthy
Fewer industry regulations
Minimal government interference led to unfair practices
Labour rights unprotected → Children largely employed in Southern states with 56 hour weeks
Advantageous foreign markets
Government encouraged foreign investment to enable technological advancements → United Fruit had a bigger budget in Costa Rica than its own government did
High tariffs (1922)
1922 Fordney-McCumber Tariff → 38.5% tax on imported goods → made goods cheaper to buy in the US rather than abroad
Changes for farmers
Agriculture during WW1 → high demand, prices rose by over 25% → Agriculture at the end of WW1 → falling demand, prices fell from $2.5 to $1 per bushel
Reasons for declining agricultural demand
Prohibition → reduced demand for grain used in alcohol
Machinery → More could be produced with less land
High foreign tariffs → reduced demand for US produce
Changes for black Americans
85% still lived in the poor South
Some moved up North to industrial cities like Chicago → faced discrimination in employment and housing
Population in Harlem up → 50,000 (1914) to 165,000 (1930)
Unequal distribution of wealth
Per capita income in North was $921 and in the South $365
60% of families had incomes of less $2,000
Overproduction
By 1920s more goods were produced than could be sold
Workers laid off → people couldn’t afford to buy goods
1920 → 80% of Americans lived close to subsistence
Land speculation (Florida)
Florida became more accessible → land values soared and people invested in development
BUT demand & values fell → 1926 hurricane
The Bull Market
Many bought shares on credit → if market collapsed left valueless but still have to pay off
Market unregulated → insider dealing (illegal selling)
Weaknesses of the Banking System
1913 Federal Reserve System → Banks given power to monitor themselves → operated in own interests
30,000 small banks issued own currency, often collapsed
Immigration laws
1921 Emergency Immigration Law → Limited immigration from European countries to 3% of nationals living in the US
1924 Johnson-Reed act → Banned immigration from Japan
The Red Scare
Mitchell Palmer (Attorney General) warned of a communist revolution in the US
Threats of violent revolution were blamed on ‘new immigrants’ from southern and eastern Europe
In the ‘Palmer raids’, 6000 were arrested on suspicion
The extent of communist support
Some commentators put communist membership as high as 600,000 while others put it at 100,000
Many confused industrial action with communism
Beliefs and methods (KKK)
Advocated white supremacy
Rallies and marches
Committed acts of brutality, including murder
Influence (KKK)
100,000 followers by 1921
50,000 marched on Washington in 1926
Impact on black Americans (KKK)
Led to migration of Black Americans to the North
Extreme violence → sympathy for victims
Many joined separatist organisations (e.g. UNIA)
Collapse of the KKK
By 1929, membership had fallen to 20,000
Leadership scandals → corruption and criminal charges
Many felt it had gone soft, with less focus on politics
Changes in politics for women
19th Amendment → given right to vote in 1920
1928 → women held 145 seats on state legislators
Only 2 / 435 delegates in House of Representatives women
