Why did the USA experience an economic boom in the 1920s?

Question 1

What natural resources did the USA already have?

Answer 1

-huge coalfields in areas such as Kentucky
-huge reserves of oil in states such as Texas
large quantities of metals such as iron, copper and lead, all important for industrial production

Question 2

How did the USA successfully exploit these natural resources?

Answer 2

-developed the most advanced transportation system
-an extensive railway network and a vast river system
-in the 1920s, the motor car was matched by a nationwide road system

Question 3

What was ‘spirit of enterprise’?

Answer 3

-the idea of rugged individualism created a basis for economic advance
- the American dream suggested that anyone of any level of wealth or talent could become rich

Question 4

Who introduced the production line and how did he utilise it?

Answer 4

-Henry Ford
-individual workers learned how to assemble only one specific part of a car
-low skilled and semi skilled workers could be employed

Question 5

How did the assembly line improve Ford’s car production rates?

Answer 5

-in 1913 it took 12.5 hours to produce a car
-by 1920, it took 2 hours 40 minutes to produce a car

Question 6

How did the number of cars in the USA change?

Answer 6

-in 1920, there were 8 million cars in the USA
-by 1929 there were 26 million cars in the USA

Question 7

What was the most produced car and how much did it cost?

Answer 7

-Ford Model T
-by 1925, it cost 290Dollars, very affordable

Question 8

What did Frederick Taylor introduce?

Answer 8

-time and motion studies of production
-new, more time efficient ways of manufacturing goods could be adopted to result in lower labour costs and higher profits

Question 9

How did the creation of large industrial corporation benefit the USA?

Answer 9

-allowed companies to benefit from economies of scale
-corporations bought up natural resources and controlled the whole manufacturing process and sales of their products
-they could benefit from lower raw material costs

Question 10

How did electrification increase the amount of electrical appliances?

Answer 10

-development of radios, vacuums and toasters
-in1912, there were 2.4 million electrical appliances
-by 1929, there were 160 million electrical appliances

Question 11

What was a downside of electrification?

Answer 11

-centred on towns and cities
-by 1929, much of the rural US were still without electricity
-but overall 75% of Americans had electricity in their homes

Question 12

What was the first major commercial radio station?

Answer 12

-KDKA in Pittsburgh
-began broadcasting in November 1920

Question 13

How did radio development help consumer spending?

Answer 13

-popular radio shows were sponsored by corporations advertising their goods

Question 14

How and why did radio ownership increase?

Answer 14

-by 1929, there were 619 commercial radio stations
-by the mid 1930s, 75% of all US households had a radio

Question 15

What did the car allow more Americans to do?

Answer 15

-to live further away from their place of work, helping to grow suburbs
-travelling, stimulating the leisure industry

Question 16

What resorts benefited from the car, which stimulated travel?

Answer 16

-Seaside resorts such as Atlantic City, in New Jersey
-National Parls

Question 17

What did the 1921 Federal Highways Act do and was it successful?

Answer 17

-gave the government responsibility for building roads
-between 1920-29, the overall length of surfaced roads increased from 350K to 662K

Question 18

How many did the car industry directly employ?

Answer 18

-375,000
-by 1929, the car industry employed 7% of the American manufacturing workforce, paying 9% of all manufacturing wages

Question 19

Which other industries did the car industry help grow?

Answer 19

-steel, rubber, glass
-engineering and electrical industries
-petrol, oil petrol stations, motels, garages

Question 20

How much did real wages rise 1923-29?

Answer 20

13%

Question 21

What did hire purchase allow?

Answer 21

-consumers to buy goods by initially paying a small portion and paying off the rest in monthly instalments

Question 22

What percentage of cars were bought through hire purchase?

Answer 22

-75%

Question 23

How much had consumer borrowing increase 1920-29?

Answer 23

-1920, 2billion
-1929, 8billion

Question 24

What was consumer spending also stimulated by?

Answer 24

-the idea that the economic boom of the 1920’s would be never ending

Question 25

Which political party dominated in the 20’s?

Answer 25

-Republican

Question 26

What was the 1922 Fordney McCumber Tariff?

Answer 26

-placed taxes on foreign goods imported into the US.
-included chemicals, textiles and farm products
-increased profits of American chemical, dye, steel and aluminium industries

Question 27

What was a limitation of the Fordney McCumber Tariffs?

Answer 27

-did nothing to help agricultural overproduction and led to a fall in farm product prices

Question 28

What was Andrew Mellon’s low tax policy?

Answer 28

-taxes on the rich were lowered from 50% to 20% in a series of revenue acts
-Mellon handed out 3.5 billion dollars in tax reductions
-he supported a reduction in public spending
-the govt had a surplus of 667 million dollars

Question 29

How did the Federal Trade Commission and Republican-run state govts reduce regulations on business?

Answer 29

-price fixing by businesses to raise profits was often ignored by the federal trade commission
-little attempt was made to regulate hours of work or the use of child labour, and wage rates kept low- all of which benefited business

Question 30

Why did agricultural prices drop after ww1?

Answer 30

-once European agriculture began to recover, demand for US food exports dropped

Question 31

How did the technological advances affect agriculture?

Answer 31

-the combine harvester greatly increased productivity in cereal production
-but increased unemployment in farm workers
-the growth of town and cities caused unemployment

Question 32

Why did farmers receive no help despite legislation ATTEMPTS?

Answer 32

-attempts to aid farmers through legislation since as the McNary-Haughen bill failed in Congress which was dominated by a laissez-faire attitude

Question 33

What did sharecropping involve for many Black Americans in the South East??

Answer 33

-poor farmers buying seed and renting land from a large landowner
-in return, they would pay back their landowner once the crop was harvested
-if harvests were poor, they suffered

Question 34

How were Black Americans treated outside of the South East?

Answer 34

-give the most menial and low paid jobs
-lived in areas of poor quality housing

Question 35

Why did many Black Americans migrate to northern cities?

Answer 35

-nearly a million left the poverty stricken South East for jobs in the prosperous northern industrial cities such as Detroit