The USA’s Economic of the 1920s

America of the 1920s was in a strong position after the war, compared to European countries. So she had plenty of money to invest in her economy had a growing population, mostly thanks to immigration had immigrants who were hard-working and ambitious her agriculture was the most efficient and productive in the world chemical industries invented many important things, such as plastic! Led the world in aviation Found faster and cheaper ways to produce goods Most US companies - did not need to export their goods - but had huge markets in Europe, Asia and South America - had access to the raw materials they needed had massive steel, coal, oil and textile industries lead the world in the new film industry

Government Taxes Taxes were reduced so that people would invest in factories and spend more on goods. Tariffs A toll was attached to import goods as a way of persuading people to buy American goods. Laisse Faire The Republican president believed in giving the economy to develop itself.

Mass Production Henry Ford developed a new form of production. He produced the same type of goods on a large scale. This meant that the price of the goods fell.

Technological Development In order to mass produce, the production line had to be used. The line was a means of producing consumer goods quickly.

The Automobile Had been developed in the 1890s- took a long time to build, were very expensive The most important and biggest of the new industries Employed hundreds of thousands of workers Kept employees working in ancillary industries, too Road construction was the biggest single employer In 1913 Henry Ford built “the Model T Ford” - revolutionized the industry - world’s first moving assembly line In 1927 they - were completed at a rate of 1 car every 10 seconds - cost $290 – 3 month’s wages for an American factory worker In million cars were made

Mass Production Requires Mass Consumption Big industries used sophisticated sale and marketing techniques Brand names became household names Advertising techniques used during the war were applied to consumer goods Huge growth in mail-order companies (esp. for people in remote areas) People could borrow money easily ‘buy now, pay later’ credit schemes sprang up Chain stores emerged all over the country

Oil and Coal

The country was able to exploit its vast resources of raw materials Industry had been powered by coal but now electricity took over, and was changing America (1918 only a few homes, (1929 almost all urban homes ) New industries and new means of mass production were developed This meant a boom in consumerism Huge amounts of goods were produced and much more cheaply than before so more people could afford them

Consumerism -. New consumer goods changed the way people lived their lives

Advertising People were told about all the new consumer goods they could purchase… Mail-order catalogues arrived

People’s State-of-Mind Changed Most Americans believed they had a right to prosperity Main Aims: a house, a car, a good job, plenty to eat, buy lots of Consuming became ‘the American way of life’ consumer (Previously people were proud to have been “thrifty”) goods Spent more money than ever before on entertainment Business people had confidence and - invested in new industries - experimented with new ideas - set up new businesses and employed people Ordinary Americans had that they - would always have employment - could buy goods on credit - could invest in industry itself by buying shares of companies

Vast New Cities -Skyscrapers: symbols of the country’s confidence! -Suburbs -New methods of transportation linked cities and towns

The Economic BOOM Cycle