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America Boom, Bust, Recovery > Economic Boom of 1920s > Flashcards

Economic Boom of 1920s Flashcards

1
Q

GNP in 1920 and 1929?

A
  • GNP in 1920: $73.3 billion

- GNP in 1929: $104.4 billion

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2
Q

What were the unemployment and inflation rates?

A
  • Unemployment remained relatively low at 3.7%

- Inflation never rose above 1%

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3
Q

How much did profits for US businesses rise between 1923 and 1929?

A

Profits for US businesses saw a 67% rise 1923-1929

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4
Q

By how much did real wages increase 1923-1929?

A

Real wages rose by 13% 1923-1929

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5
Q

Where and what were the natural resources found?

A
  • Coal fields in West Virginia and Kentucky
  • Huge reserves of oil in Texas and California
  • Vast amounts of metals (iron, copper, lead) which were needed for manufacturing/ industry
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6
Q

What was the effect of “from home” natural resources?

A
  • US didn’t have to pay import taxes, cheaper= powered economic growth
  • Created jobs in mining
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7
Q

What was developed to exploit natural resources? How many miles of railway in 1916?

A
  • Huge transportation network

- 1916: over 254,000 miles of railway in place, used to transport goods and raw materials

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8
Q

What was the population of the US in 1920 and 1929?

A
  • 1920: 106 million Americans,
  • 1929: almost 122 million Americans
  • far outweighed Britain’s 42 million
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9
Q

What were the advantages of a large population?

A
  • After WW1 millions of immigrants immigrate to US= cheap labour for US businesses, as immigrants more likely than Americans to accept lower wages
  • Wider domestic market, more people= increased demands for goods and more people working jobs to fuel this demand
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10
Q

What was the Spirit of Enterprise?

A
  • Belief that prosperity and wealth of the 20s was going to be never ending
  • Rugged individualism seen as the basis for economic advancements
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11
Q

What was the American Dream?

A
  • Anyone can succeed and become very wealthy if they work hard, America provides opportunity for social mobility.
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12
Q

How was the idea of the American Dream sold?

A
  • Highly advertised, specifically attracted immigrants with slogans
  • Self made millionaires Ford and Andrew Carnegie= real proof of the American Dream
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13
Q

What is Hire Purchase?

A

Consumers pay for a fraction of the total price upfront and pay off rest in monthly instalments

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14
Q

By how much did real wages increase and what was the impact?

A

Real wages increased by 13% = more disposable income and demand for goods

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15
Q

What was consumer borrowing in 1920 vs 1929?

A

1920: $2 billion, 1929: $8 billion

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16
Q

What was the effect of hire purchase?

A
  • Encouraged even those without money to spend
  • Widened market: goods previously considered luxury now bought by m/c and w/c on hire purchase e.g. hoovers, fridges, washing machines, cars
  • 75% of cars bought on hire purchase
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17
Q

What was the impact of Ford’s Assembly Line?

A
  • One worker assembles one specific part of a car over & over, skilled workers no longer needed= cheaper labour, more profit
  • Assembly line moves at steady pace= sets rate of production
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18
Q

How long did it take to produce a car in 1913 vs 1923?

A
  • 1913: 12.5 hours to produce a Ford car

- 1923: 2 hours 40 minutes

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19
Q

What was the effect of the creation of large industrial corporations?

A

Large industrial corporations bought up natural resources, controlled whole manufacturing process & sales from products. Benefited from economies of scale, lower raw material costs= pass savings on to consumers.

20
Q

What is an example of a large corporation that controlled a very large proportion of the market?

A

Samuel Insull- controlled 111 separate but linked companies by 1929, $3 billion value

21
Q

What was ownership of US electricity supply industry like?

A

By 1929, 16 companies controlled 90% of US’s electricity supply industry.

22
Q

What was the most produced car in the 1920s?

A

Ford Model T, available only in black, cheapest colour to manufacture.

23
Q

How much did the Ford Model T cost?

A

Price dropped from $950 in 1918 to $290 in 1925 as a result of mass production (higher output, lower prices)

24
Q

How many car registrations were there in 1920 compared to 1929?

A
  • 8 million in 1920

- 26 million in 1929.

25
Q

How many cars was Ford producing in a year?

A

1.25 million cars a year

26
Q

How many workers did the car industry employ?

A

375,000 workers

27
Q

What percentage of the manufacturing workforce did the car industry employ? What percentage of manufacturing wages?

A

By 1929: employed 7% of all manufacturing workforce, paying 9% of all manufacturing wages= more disposable income for workers, fuelling consumerism

28
Q

What industries did the automobile stimulate?

A

Stimulated growth of steel, rubber, glass and oil industries (petrol and materials for production)

29
Q

What was used to convince customers to buy?

A

Advertisements and mass marketing e.g. billboards on roads, but especially using radio

30
Q

What and when was the first commercial radio station introduced?

A

KDKA: first commercial radio station in 1920

31
Q

How many commercial radio stations were there by 1929?

A

By 1929: 619 commercial radio stations sponsored by corporations, broadcasting products to the masses.

32
Q

What leisure activity saw a rise in the 1920s?

A

By 1929: rise in cinema, every town had a cinema with Hollywood films broadcast.

33
Q

What was the effect of electrification?

A

Increase in demand for goods needing electricity e.g. labour-saving devices such as vacuum cleaners, washing machines, fridges.

34
Q

How many electrical appliances in the US in 1912 vs 1929?

A
  • 1912: 2.4 million

- 1929: over 160 million.

35
Q

How many radios were sold in 1929? What percentage of households had a radio by mid 1930s?

A

Over 10 million radios sold in 1929 alone, 75% of US households had on by mid 1930s

36
Q

What was the impact of more car ownership?

A
  • People able to live further from work= fuels growth of suburbs.
  • Ability to travel= rise in holidays out of state, fuelling leisure industry e.g. Atlantic City, New Jersey (seaside resorts), national parks become more popular.
37
Q

What was the 1921 Federal Highways Act?

A

Gave government responsibility of building roads, aiding transport/ travel.

38
Q

How many miles of roads was there in 1920 vs 1929? What was the effect of this?

A
  • 1920: 350,000 miles
  • 1929: 662,000 miles
  • created more jobs in the construction of roads
39
Q

What is laissez-faire politics?

A

Limited government intervention and regulation of industry and businesses

40
Q

What was the 1922 Fordney-McCumber Tariff? What was the downside of this?

A
  • Put tariffs on foreign goods (chemicals, textiles, farm products) so people are encouraged to buy American goods, seen as cheaper= more profit for American industries
  • Downsides: Other countries responded by raising tariffs on American goods= less US exports
  • Did not deal with problem of agricultural overproduction, led to a fall in farm product prices
41
Q

What was the 1926 Revenue Act?

A
  • Lowered tax rate on high earners from 50% to 20%

- Lowered taxes on transfer of property and repealed the gift tax

42
Q

What did Secretary of Treasury Andrew Mellon do?

A
  • Handed out $3.5 billion in tax reduction in 8 years
  • Balanced federal budget so that gov made money under Coolidge e.g. $677 million profit made in 1925, reduced national debt
43
Q

How did the Federal Trade Commission and Republican Government favour businesses?

A
  • Reduced regulations on businesses
  • Did little to regulate work hours or the use of child labour
  • Wage rates were kept low
  • Ignored illegal price-fixing used to raise profits
44
Q

How were Trade Unions treated differently in WW1 vs under the Republican Government of Coolidge?

A
  • During WW1, federal gov protected rights of workers to join Trade Unions (over 4 million members) but Coolidge has said “the business of America is business”. Trade unions faced a difficult time in the 1920s.
45
Q

What was “The American Plan”?

A

A slogan for reducing union power, increasingly popular amongst employers with anti-union views e.g. Ford. No-strike and no-union agreements forced on workers.

46
Q

How much had Trade Union membership declined by 1929?

A

1929: union membership declined by nearly 1 million

47
Q

How did the Supreme Court contribute?

A
  • Supreme Court made 4 significant anti-Union decisions from 1921-25, restricting their power
  • 1922: Attorney General Dougherty broke the railroad shopman’s strike by securing support of a business-friendly judge.

America Boom, Bust, Recovery (14 decks)

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