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Why did America boom in the 1920s? A very brief set of notes…

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Presentation on theme: "Why did America boom in the 1920s? A very brief set of notes…"— Presentation transcript:

1 Why did America boom in the 1920s? A very brief set of notes…

2 Why did America boom in the 1920s? This presentation will look at 3 main areas: What is an economic boom? Why did it happen? Did everyone benefit from it? To return to the start click the logo. What is an economic boom?Why did it happen?Did everyone benefit?

3 What is an economic boom? A rapid growth in a countrys money making that leads to increased prosperity (wealth). The economic boom in America was based around consumer goods – luxury items that people wanted to buy but didnt really need. What is an economic boom?Why did it happen?Did everyone benefit?

4 Examples of consumer goods Cars9 million in million in 1929 Radios60,000 in million in 1929 Telephones10 million in million in 1930 Other consumer goods included: nylon stockings and fridges What is an economic boom?Why did it happen?Did everyone benefit?

5 Why did America boom? Industrial Strength World War One New Ideas and Industries Republican Policies Confidence What is an economic boom?Why did it happen?Did everyone benefit?

6 Industrial Strength America had large natural resources: Oil – Texas Coal – Kentucky Iron – Chicago America had good agriculture (farming): Cattle ranching – Colorado What is an economic boom?Why did it happen?Did everyone benefit?

7 World War One American industry had profited by selling war goods to Britain and France The disruption to British and French industry allowed America to become the worlds leading exporter America only joined the war in 1917 so had not suffered so badly – in contrast, by 1918 Britain owed the USA £900 million. What is an economic boom?Why did it happen?Did everyone benefit?

8 New Ideas and Industries What is an economic boom?Why did it happen?Did everyone benefit? The 1920s saw a dramatic change in American industry, for example: Henry Ford ran the Ford Motor Company. It made the most famous car of the 1920s the Model T Ford. It was slow, ugly and nick named the Tin Lizzie. However, by 1929 they were making more than 1 car a minute at the Red River plant. It was successful because it was cheap. Mass Production – every part was standardised (only one colour and choice of engine), the cars were put together on a production line. The cars were moved along while workers did simple repetitive tasks, for example you might put on wheels all day. This unskilled workers could be paid less. Mass production was cheap and quick.

9 Cycle of Prosperity What is an economic boom?Why did it happen?Did everyone benefit? More cars were made More parts were needed Other industries grew More people had jobs New opportunities motels road building petrol stations steel glass leather rubber

10 Republican Policies Laissez Faire – French phrase meaning leave to do. Republicans believed that if government did not interfere in peoples lives then they would be free to make money. Tariffs – taxes placed on imported goods so that there was less competition for US businesses Low Taxes – so people had more money to spend, for example on consumer goods. Republicans believed this would help the economy grow. Trusts – large companies were allowed to control whole industries. For example, Carnegie controlled the steel industry. It was believed that this would lead to them becoming more successful and efficient. To be President in the 1920s was to be a Republican. Some of the policies followed by Harding, Coolidge and Hoover were: What is an economic boom?Why did it happen?Did everyone benefit?

11 Confidence All of these factors (reasons) helped make Americans feel more confident. This confidence led them to spend more, which in turn made the economy grow even faster. Americans in the 1920s were confident enough to start borrowing money to buy goods. Companies increasingly offered hire purchase where consumers could buy now, pay later. For example, you could hire a car for a long period of time, once you had paid enough money the car would become yours. What is an economic boom?Why did it happen?Did everyone benefit?

12 Did everyone benefit from the boom? The simple answer is no. In the 1920s nearly half of all Americans lived in rural areas (the countryside). During this time agriculture (farming) was actually suffering. Farm Incomes dropped from: $22 billion in 1919 to $13 billion in 1928 There were several reasons for this: Tariffs reduced trade with other countries World War One meant that Europe couldnt afford American food exports Canadian wheat producers were growing more grain Over production made prices fall. Dustbowl – over farming led to some areas in the mid west to become unusable desert. As a result, millions left for the cities. For the first time, more Americans were living in cities than in the countryside. What is an economic boom?Why did it happen?Did everyone benefit?

13 Did everyone benefit from the boom? The booming American economy in the 1920s led President Hoover to say: What is an economic boom?Why did it happen?Did everyone benefit? we in America today are nearer to the final triumph over poverty than ever before in the history of any land 10%32% $ But there was still great inequality. 32% of the wealth went to the richest 5% of people. Only 10% of wealth went to the poorest 42% of people. Therefore, nearly half of all Americans were too poor to take part in this consumer good based boom.


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