Reasons for prosperity (T1) Flashcards
What were the factors that created prosperity?
- government policies
- technological advances
- new business methods
- easy credit
- advantageous foreign markets
Who were the Republican presidents of the 1920s?
- Harding 1921-1923
- Coolidge 1923-1929
- Hoover 1929-1933
What was the collective belief of all 3 Republican presidents?
As little government involvement in the running of the economy as possible.
Who was the Treasury Secretary 1921-1932?
Andrew Mellon
What did Andrew Mellon believe in?
- Believed that wealth filtered down naturally to all classes in society.
- Best way to ensure increased living standards for all was to allow the rich to continue to make money to invest in industrial development.
What was the government policy of the 1920s?
Laissez-faire
What was the laissez-faire policy?
The government intervened as little as possible in the economy, allowing the free market to operate with minimal restrictions.
Was there any government intervention at all?
The government did intervene to support business with benevolent policies in three main ways.
What was the Act introduced which raised tariffs?
The Fordney-McCumber Act, passed in 1922, raised tariffs on imported goods to cover the difference between domestic and foreign production costs.
What was the impact of the Fordney-McCumber Act?
Meant that for some products import duties were so high that domestic producers were given an almost guaranteed market.
What tax reductions were made throughout the 1920s?
Reduced federal taxes in 1924,1926 and 1928.
Who benefitted from these tax cuts?
Mainly benefited the wealthy.
What was the overall amount of tax reductions?
Mellon handed out tax reductions totalling $3.5 billion to large-scale industrialists and corporations.
What was the surplus of Coolidge’s government?
$667 million in 1925 and $607 million in 1927.
Did federal tax cuts benefit the poor?
Meant little to people who were too poor to pay taxes in the first place.
What led to fewer regulations?
Economies in government and the attempt to spend less money.
What type of laws were ignored by the government concerning regulations?
Concerning sharp business practice, such as price fixing between companies to prevent fair competition.
Why was lack of regulation important?
Could be an important contributor to a company’s profits.
How was there lack of regulation in the Southern States?
No organisation with the authority to stop child labour in the textile mills in the South.
What was the wage of child labour in 1920s?
A 56-hour week was common there and wages rarely rose above 18 cents an hour.
Where did mass production originate?
Particularly associated in the USA with car manufacturer Henry Ford.
What type of mass production became popular?
The assembly line.
What helped with the growth of the assembly line?
The introduction of electricity made moving assembly lines possible.
How did Ford develop the assembly line?
So that everything was subservient to the production line.
How were workers on the assembly line treated by Ford?
Were not allowed to take breaks except when designated, so work was repetitive and had to be geared to the speed of the line.
What was the result of the assembly line?
Massive increases in production not just in motor vehicles, but in industries such as clothing and labour-saving devices.
What made the mass production of clothes possible?
- Introduction of standard clothing sizes during WW1.
- Possible to mass produce clothing using cheaper materials.
How much of the motor vehicle industry did Ford control?
50% by 1924
When did Ford’s model ‘T’ car first appear?
1908.
What did Ford change with his car?
Cars had been for the wealthy, and Ford wanted ordinary Americans to afford a car.
