Causes of the Economic Boom in America in the 1920’sThe period from 1920-29 is often called the ‘Roaring Twenties’ because it was a time of noise, lively action and economic prosperity. The First World War had been good for American business. Factory production had risen sharply to meet the needs of the war. America had been able to capture markets that used to buy from Europe. Once the war was over these countries continued to buy American goods. Show
The Republican governments of Presidents Harding, Coolidge and Hoover, tried to help American businesses by increasing taxes on foreign goods coming into the USA. This was achieved by passing a new law called the Fordney – McCumber Tarriff Act in 1922. These new import taxes were called ‘Tariffs’ and made goods that were made outside of the USA more expensive to buy. This in turn encouraged Americans to buy goods made in the USA. This led to a Boom or an increase in the amount of goods being made and sold by American businesses. Economic Boom in the 20’s, from Youtube. America in the 1920’s. The Boom. Key Points:America’s economy recovered quickly after The First World War. Factors leading to the BoomUS industry had been boosted by the war. Case Study: Henry FordThe greatest business boom took place in the motor car industry. There were three big car producers in the 1920s: Ford, Chrysler and General Motors. By far the biggest at this time was the Henry Ford Motor Company. Henry Ford in 1919Henry Ford set out to build a car that everyone could afford to buy. Ford started mass-producing his first car, the Model T Ford in 1909. It was slow, ugly and difficult to drive, but for the next eighteen years this car, nick named ‘Tin Lizzie’, was America’s best selling car. The big attraction of the Model T Ford was its price, it never increased and instead it kept on dropping. Costing $1200 in 1909, the price in 1928 was only $295. By the end of the 1920s Ford was producing more than one car per minute. Video Clip: The Ford Assembly Line, circa 1919. Henry Ford was able to sell cars more cheaply because they were mass-produced and every part was standardised (only one colour and one engine size were available). By
producing large numbers of cars on an assembly line Ford needed fewer workers, and that cut the cost of paying wages. By standardising the parts he cut production costs even further.
The car industry helped to make America richer in the 1920s. Car production used up 20% of America’s steel, 80% of her rubber, 75% of her plate glass, and 65% of her leather. The more cars that were made, the more jobs that there were created in these industries. By the end of the 1920s American cars used seven billion gallons of petrol a year. This helped to create jobs in the oil industry and made the oil state of Texas rich. New roads had to be built for the increased numbers of cars. This meant more jobs for the construction and building industries. And along these new roads sprang up thousands of garages, ‘gas stations’, restaurants, ‘diners’ and ‘motels’ – all creating even more jobs. People with jobs could afford to spend part of their wages on luxury goods such as a new car or a vacuum cleaner!
Relevant Links:Henry Ford Museum. How was business changing during the 1920s?Throughout the 1920s, each year saw a rise in every leading economic indicator (signs that the economy is thriving). Income levels rose (workers, for example, made 26 percent more in 1929 than they had in 1919), as did business growth, new construction, and stock market trading.
What happened to business during the 1920s?The 1920s is the decade when America's economy grew 42%. 1 Mass production spread new consumer goods into every household. The modern auto and airline industries were born. The U.S. victory in World War I gave the country its first experience of being a global power.
What industry had the greatest impact on the 1920s?Case Study: Henry Ford
The greatest business boom took place in the motor car industry. There were three big car producers in the 1920s: Ford, Chrysler and General Motors. By far the biggest at this time was the Henry Ford Motor Company. Henry Ford set out to build a car that everyone could afford to buy.
What was the main impact of the changes of the 1920's on American society?The 1920s was a decade of profound social changes. The most obvious signs of change were the rise of a consumer-oriented economy and of mass entertainment, which helped to bring about a "revolution in morals and manners." Sexual mores, gender roles, hair styles, and dress all changed profoundly during the 1920s.
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