Topic 1 : Causes of the boom

Question 1

Republican Policies : Tariffs

Answer 1

Fordney McCumber Act 1922

• Raised tax on foreign goods
• Guaranteed domestic market

Question 2

Republican Policies : Tax Reductions

Answer 2

65% in 1920 to 25% in 1928

• Reduced national debt
• Andrew Mellon, treasury secretary handed out 3.5 billion dollars from tax reductions to businesses

Question 3

Republican Policies : Fewer Regulations

Answer 3

“Laissez-faire”

• Price-fixing
• Child labour -> less wages
• Federal Trade Commission inactive

Question 4

Industrial Strength : Population

Answer 4

120 million by 1923

-Huge domestic market

Question 5

Industrial Strength : Resources

Answer 5

Abundance of natural resources

• By 1914 USA led the world in oil, coal and steel production.
• In 1918, lots of new coalfields in Ohio and Illinois

Question 6

Industrial Strength : New technology

Answer 6

Improved technology

• By 1914 USA led the world in electrical appliances
• By 1920 35% of homes had telephones

Question 7

WWI : Finance

Answer 7

Did not enter war until 1918 so less economically damaged

-Loaned money to Europe which was to be payed back with interest

Question 8

WWI : Munitions

Answer 8

USA sold munitions to allies

• One way trade system
• By 1916 USA had sold 1.3 billion dollars worth of munitions to Britain

Question 9

WWI : Trade

Answer 9

USA took over Europe’s trading partners

-Took over Germany’s chemical industry and mass produced new goods eg plastic

Question 10

The Car : Other Industries

Answer 10

Car production stimulated other industries

• 75% of glass produced was used for cars
• High demand for natural resources eg oil

Question 11

The Car : Accessibility

Answer 11

More people able to buy a car

• $500 in 1914 to $290 in 1925
• By 1929, 23 million cars on the road
• In 1925 car made every 10 seconds

Question 12

The Car : Direct Impacts

Answer 12

Car Production made up 7% of national employment

-Made up 10% of national wages

Question 13

Mass Production : Goods

Answer 13

Goods mass produced to match demands and increase profits

• 300,000,000 silk stockings sold in 1930
• 20 million radios sold in 1930

Question 14

Mass Production : Indirect effects

Answer 14

• Truck registration increased by 2.5 million from 1919 to 1929
• 15 billion gallons of petrol used in the 1920s

Question 15

Financial Structure : Credit

Answer 15

People able to buy goods they didn’t have the money for

• By 1929, $7 billion worth of goods sold on credit.
• 75% of cars sold on credit

Question 16

Financial Structure : Advertisement

Answer 16

• 20,000 cinemas in US by 1929 where goods could be advertised
• By 1929, 618 national radio stations

Question 17

Financial Structure : Large Corporations

Answer 17

• Owned 20% of the nations wealth by 1929

- Merger companies and price fixing