1a: 1920s Econ boom - Reasons for Prosperity Flashcards
(22 cards)
What did many companies begin to adopt?
Mass production strategies.
This was enabled by the more efficient assembly line method.
How did govt policies encourage business to develop?
They applied few regulations and slashed taxes, enabling growth.
What are the 5 main factors that created the prosperity?
- Govt policies.
- Tech advances
- New business methods
- Easy Credit
- Advantageous Foreign markets.
Which political party dominated the 1920s?
The Republican party.
Who were the three Republican Presidents?
Warren Harding (1921-1923) Calvin Coolidge (1923-1929) Herbert Hoover (1929-1933)
What did the Republicans believe in?
Little govt involvement in the economy.
Took a laissez-faire approach: the market could operate with minimal restrictions.
What did Treasury Secretary, Andrew Mellon (1921-1932), say about wealth?
Mellon believed wealth filtered down the social strata so the best way to improve living standards was to let the rich amass great wealth.
What was the Fordney-McCumber Tariff of 1922?
Tax on imports to the USA - cover the difference between domestic and foreign production costs.
Made domestic goods cheaper.
Tariff so high on some goods that domestic producers were given a guaranteed market.
What was a negative of the Fordney-McCumber Act?
It limited foreign trade.
What happened to taxes in the 1920s?
Federal taxes were reduced in 1924, 1926, 1928.
This benefited the wealthy.
Mellon handed out tax reductions ($3.5 billion) to large corps.
What did fewer regulations mean?
Give example
Exploitation and price fixing.
Child labour in Southern textile mills.
- 56-hour-week on 18 cents an hour.
Who initially introduced the assembly line method?
Henry Ford in 1913.
By 1924, how much of the motor vehicle industry did Ford own?
50%.
What made assembly lines possible?
The introduction of electricity.
What was a negative human consequence of the assembly line?
The work was repetitive and dull - it turned human into automata.
What was the key advantage of the assembly line?
It was efficient and boosted productivity across various industries.
What was automobile ownership like at the start of the 1920s compared to the end?
1920: 7.5 million.
1929: 27 million cars on the road.
What was an industrial positive about the growth in motor vehicles?
The automobile industry was the largest market for commodities, such as steel and rubber.
What did Rob and Helen Lynd find about cars in 1929?
In their survey of ‘Middletown’, 50% owned a car whereas 33.3% owned a bathtub.
What percentage of the entire workforce did the motor industry employ?
7% of all workers in the United States.
What other industries did the motor industry stimulate?
Petrol, rubber, plate glass etc.
How did the govt break from the laissez-faire policy through road building?
Federal Highway Act, 1921:
- Gave responsibility for road building to central govt.
- 10,000 miles of highway a year being built by 1929.
