5.1 USA: How far did the economy boom during the 1920s? Flashcards
How did industrial strength lead to the Boom?
-Population: 123m, 1923; most of it lived in cities+worked in industry; higher wages; bigger market.
- Raw materials: Leading oil producer (Texas), Coal (Illinois), Iron+gas (Minnesota).
Technology: Cars, telephones, electric lighting, chemicals, agriculture= most efficient (although this became a problem later on)
- As a result, most US companies didn’t have the need to export products and import raw materials.
How did WWI lead to the Boom?
- One-way trade. Europe’s market turned to the US because Europe couldn’t produce: Arms+munitions, foodstuffs.
- European succesful industries collapsed (e.g. Germany’s chemical industry so the US’ chemical industry grew)
- Manufacture lead to new products: plastics+other materials.
- Aircraft technology was improved (1930: 162,000 civilian flights per year).
How did Republican policies (1920-1932) lead to the Boom?
- Laissez-faire: interfere as little as possible in the economy; leave the businessmen alone. ‘Rugged individualism’ = Americans could fight against their problems.
- Low Taxation: Ordinary working people will have more money to buy American goods + Businessmen would have more money to reinvest.
- Protective Tariffs: Protected businesses against foreign competition (Fordney-McCumber tariff made imported food expensive)
- Powerful Trusts: Corporations that owned monopolies were trusted to do whatever they wanted. Republicans thought this ‘captains of industry’ knew better than politicians what to do. (Rockefeller = Oil)
How did new goods lead to the Boom?
- 1920s: electricity was being used; Telephones, radios, vacuum cleaners, washing machines.
- Rayon substituted the ‘luxurious’ silk. (1900: 12,000 pairs of silk sold; 1930: 300m pairs of rayon sold).
- Car: Model T Ford; 1920s motor industry was USA’s biggest industry, boosted glass (car industry used 75% of US glass), leather, steel, rubber, Road construction (biggest single employer, 1920s), made it possible to buy houses at suburbs, holiday resorts, advertising billboards.
How did mass production lead to the Boom?
- Consumer goods (Telephones, radios, vacuum celaners, washing machines) were mass produced.
- 1913: Henry Ford sets up first moving production line, Detroit. Fast: 1 car/10 sec. therefore cheap in 1925: $290 (3 months’ wages of an American factory worker)
How did mass consumption lead to the Boom?
- Mass nationwide advertising: developed during WWI to get Americans to support the war; now used to sell products like cars or cigarettes: Billboards, radio advertisements, traveling salesmen… Encouraged spending.
- Mail order companies: Americans from remote areas could now buy goods from catalogues: In 1928, 1/3 of Americans bought goods from Sears, Roebuck and Company catalogue. This expanded the market.
- ‘Buy now, pay later’: 80% of radios bought on credit.
- The Brand: same shop selling the same products through America made products popular.
How did confidence+consumism lead to the Boom?
- The ‘spending money’ quality had replaced thrift.
- Confidence to invest, set up businesses, buy goods, buy shares.
What were the causes of the Boom?(7)
Industrial Strength WWI Republican Policies New goods Mass production Mass consumption Confident+Consumist society
The USA is a federal system. What does this mean?
Each state looks after its internal affairs (education) but matters that concern all the states are dealt with by Congress.
How is the President of the US elected and controlled?
Elected every 4 years.
Congress and the Supreme Court (Constitution) ensure he is obeying the constitution and ruling America in a good way.
What is the American Congress made out of?
Senate and the House of the Representatives.
What is the Supreme Court?
Court made out of experienced judges that have the power to say if a law is unconstitutional.
What two main parties where there in America?
Republicans: Stronger in the industrial north, non-interventionist.
Democrats: Stronger in the South. More interventionist.
What caused the US total farm income to decrease from $22 billion in 1919 to $13 billion in 1928? (FOND)
- Falling prices: 1921, prices fell by 50%.
- Overproduction: due to machinery (like the combined harvester) and fertilisers.
- New competitors: Canadian wheat producers.
- Declining European exports: after WWI Europe was poor + as a response to US tariffs (like the Fordney-McCumber tariff)
Where all farmers affected by the agricultural problems during the 1920s?
No. Rich Americans that lived in the city wanted fresh vegetables and fruits. Shipments of Lettuce to the cities increased from 14,000 crates in 1920 to 52,000 in 1928.
