O PENING Q UESTION How did the American economy change during World War One? (think about what was being produced and how much) What effect(s) is this going to have on the U.S. in the 1920s?

A C HANGING E CONOMY

T HE A UTOMOBILE D RIVES P ROSPERITY Henry Ford utilized the assembly line method to mass produce his first major automobile– the Model T. This method cut down on costs, so he could reduce the price to where the average person (including his workers) could by the Model T. The automobile led to other changes in society: Industries that manufactured supplies for the automobile boomed; Road construction increased– U.S. Highway System of 1926; Development of service stations, diners and motels; Other forms of transportation decline; New sense of freedom and prosperity; Movement to homes outside of the city.

A B USTLING E CONOMY A consumer revolution happens whenever there is a flood of new, affordable goods on the market. New methods of advertising attracted consumers; Emergence of installment buying– make a small down payment and pay the rest off in monthly increments; Surge in the stock market led people to want to purchase stock, but they had to purchase it on credit– known as buying on the margin; This was only a successful option when the market was good, though.

CHANGES IN RESIDENTIAL PATTERNS The general consensus of movement during the 1920s was to the cities– farmers, African Americans and even Mexican Americans to southwest cities. The 1920s was the first decade where more people lived in cities than in rural areas. There was a group that was leaving the city instead and moving to the suburb– urban, middle class workers. This was aided by the development of the automobile. Not every person was feeling the benefits of the 1920s. Farm wages and industrial workers’ wages were still far below everyone else’s.

T HE C HANGING ROLE OF G OVERNMENT

T HE H ARDING A DMINISTRATION When Harding took office, he promised a “return to normalcy”. This included a return to policies that benefitted big business. After appointing Andrew Mellon as Secretary of the Treasury, Harding’s administration cut spending. However, not all of Harding’s appointments as president were as successful. He trusted much of the decision making to his close friends, known as the Ohio Gang. The worst of this gang was Secretary of the Interior Albert Fall.

T HE H ARDING A DMINISTRATION Fall had the ability to transfer oil reserves between different departments. He transferred reserves from the Navy Department to the Interior Department, which he then “loaned” to rich businessmen. The oil was on reserve for a time of emergency. Although Fall concocted the scheme, Harding signed the order to allow it to happen. It became known as the Teapot Dome Scandal, named after one of the locations of oil reserves.