1. Unit III – A Modern Nation
Chapter 9 Section 2
A New Economic Era

2. A New Economic Era The Main Idea
New products, new industries, and new ways of doing business expanded the economy in the 1920s, although not everyone shared in the prosperity.
Reading Focus
What role did the Ford Motor Company and Henry Ford play in revolutionizing American industry?
How did both the auto industry and the nation change during the 1920s?
What were some qualities of the new consumer of the 1920s?
What were some weak parts of the economy in the 1920s?

3. Henry Ford: Changing the Way Americans Worked, Played, and Traveled (02:42)

4. Ford Revolutionizes Industry
The first cars appeared in the U.S. in the 1800s, but only the rich could buy them, until Henry Ford began selling the Model T in 1908.
Ford’s vision combined three main ideas.
Make cars simple and identical instead of doing highly expensive custom manufacturing.
Make the process smooth, using interchangeable parts and moving belts.
Determine how workers should move, and at what speed, to be the most productive.
These ideas formed the first large-scale moving assembly line, a production system in which the item being built moves along a conveyor belt to workstations that usually require simple skills.
By the 1920s Ford made a car every minute, dropping prices so that by 1929 there were about 22 million cars in America.
Ford raised his workers’ wages so they could also buy cars, but he opposed unions, and assembly lines were very boring.

6. Life in the Jazz Age - Automobile
As the end of the decade neared, Ford and Chevrolet locked horns in a fierce pricing battle that continued through the Thirties. Other automakers, such as Cadillac, Packard, and Chrysler, began to have an impact on the market.
Virtually every household in America owned an automobile, and it quickly became an integrated part of American life. Parents would drive to work in their automobiles. Families could visit friends and family who lived farther away. And young people found a whole new way to have fun. Entertainment and recreation as well as work.
A wide variety of new industries were spawned- petroleum, manufacturing, road construction, etc.

7. Automobile Production
Motor Vehicle Production (Thousands)
Year
U.S.
Canada
France
U.K.
Germany
Italy
Czech
Russia
1907 45 3 25 12 4
1913
485 15 34 14 2
1924
3504
135
145
133 18 35
1928
4359
242
210
212 90 55 13 1
1935
3971
173
165
404
240 44 10 97

8. Ford Revolutionizes Industry
What made it possible for Ford’s workers to be able to buy cars themselves?
Why was Henry Ford’s Model T such a revolutionary idea?
How did the assembly line both benefit and hurt workers?

9. The Effects on Industry
The Ford Motor Company dominated auto making for 15 years, but the entire industry grew when competitors like General Motors and Chrysler tried to improve on Ford’s formula by offering new designs, starting competition.
Other industries learned from Ford’s ideas, using assembly-line techniques to make large quantities of goods at lower costs, raising productivity, or output, by 60 percent.
The success of businesses led to welfare capitalism, a system in which companies provide benefits to employees to promote worker satisfaction and loyalty.
Many companies offered company-paid pensions and recreation programs hoping employees would accept lower pay, which many did.

10. Industry Changes Society
Car Effects
Demand for steel, rubber, glass, and other car materials soared.
Auto repair shops and filling stations sprang up.
Motels and restaurants arose to meet travelers’ needs.
Landowners who found petroleum on their property became rich.
Cities and Suburbs
Detroit, Michigan, grew when Ford based his plants there, and other automakers followed.
Other midwestern cities, like Akron, Ohio, boomed by making car necessities like rubber and tires.
Suburbs, which started thanks to trolley lines, grew with car travel.
Tourism
Freedom to travel by car produced a new tourism industry.
Before the auto boom, Florida attracted mostly the wealthy, but cars brought tourists by the thousands.
Buyers snatched up land, causing prices to rise.
Some Florida swamps were drained to put up housing.

11. Industry Changes Society
How did the Auto industry and the nation change during the 1920’s?
What new industries developed as a result of automobiles?
How did the growth of the automobile industry affect the American lifestyle?
Why did Henry Ford and other automakers choose the Detroit, Michigan, area for their center of operations?

12. The New Consumer
During the 1920s, an explosion of new products, experiences, and forms of communication stimulated the economy.
New Products
New factories turned out electrical appliances like refrigerators and vacuum cleaners, as more homes were wired for electricity.
The radio connected the world, and by the late 1920s, 4 homes in 10 had a radio, and families gathered around it nightly.
The first passenger airplanes appeared in the 1920s, and though they were more uncomfortable than trains, the thrill excited many Americans.
Creating Demand
Advertisers became the cheerleaders of the new consumer economy.
Persuasive advertising gained a major role in the economy.
Advertisers paid for space in publications, and companies sponsored radio shows.
Advertising money made these shows available to the public, and ads gave the products wide exposure.

14. The Radio
Most radio historians assert that radio broadcasting began in 1920 with the historic broadcast of KDKA
Radio became a product of the mass market
Between 1923 and 1930, 60 percent of American families purchased radios. Families gathered around their radios for night-time entertainment
Radio stations broadcast things like popular music, classical music, sporting events, lectures, fictional stories, newscasts, weather reports, market updates, and political commentary.
The Federal Radio Commission was set up in ; the Radio Act of 1927 organized the Federal Radio Commission.
Crystal radios, like the one at left, were among the first radios to be used and manufactured.

15. The Phonograph
The phonograph or Victrola was developed as a result of Thomas Edison's work on two other inventions, the telegraph and the telephone.
Uses of the Phonograph- according to Edison
Letter writing
dictation
Phonographic books,
The teaching of elocution.
Reproduction of music.
The "Family Record"--a registry of sayings, reminiscences, etc., by members of a family in their own voices, and of the last words of dying persons.
Music-boxes and toys.
Clocks
The preservation of languages
Educational purposes.
Connection with the telephone

16. Refrigerators
Two of the first home refrigerators both appeared in Fort Wayne, Indiana, where, in 1911, General Electric company unveiled a unit invented by a French monk. In the first "Guardian" refrigerator - a predecessor of the Frigidaire - was assembled in a wash house in a Fort Wayne backyard.
Kelvinator and Servel models were among some two dozen home refrigerators introduced to the U.S. market in In 1920 the number had increased to more than Compressors were generally driven by belts attached to motors located in the basement or in an adjoining room.
In 1918 Kelvinator introduced the first refrigerator with any type of automatic control. One manufacturer's model had a wooden cabinet, a water-cooled compressor, two ice cube trays and nine cubic feet of storage space. It cost $714. In 1923 Frigidaire introduced the first self- contained unit. Steel and porcelain cabinets began appearing in the mid-20s.

17. Washing machines
In 1922 The Maytag Company introduced a system of forcing water through the clothes by means of an agitator rather than dragging the clothes through the water. This system is most commonly used now.
Even as early as 1875 there had been more than 2,000 patents issued for various washing devices. Not every idea worked, of course. One company built a machine designed to wash only one item at a time.
What may have been the first "laundromat" was opened in 1851 by a gold miner and a carpenter in California. Their 12-shirt machine was powered by 10 donkeys.
Earliest washers were hand powered by means of a wheel, pump handle or similar device. One, was driven by twisted ropes which powered the washer by "unwinding" somewhat like the use of a rubber band to power model airplanes. One washer contained rollers which were pushed back and forth by hand to squeeze out dirt. Several featured "stomping" devices and one - called a "Locamotive" was moved rapidly back and forth on a track washing the clothes by slamming them against the walls of the tub.

18. Vacuum Cleaners
In 1907 an American named James Murray Spangler, who was working as a cleaner, Designed the first small electric cleaner. he sold the patent to a harness maker named Hoover. By the 1920's Bothe started to produce his own range of electric cleaners under the Goblin name. He had 2500 door to door sales representative's in England selling mainly under hire purchase. Both the Hoover and the Goblin range were very successful and are still operating today selling machines that have not changed much in basic design since their first prototype.
In 1908 Hoover introduced the Model O vacuum, the first to use both a cloth filter bag and cleaning attachments. The machine weighed only 40 lbs.
Hoover developed positive agitation in 1926, and this greatly increased the dirt removal efficiency of the vacuum. The Model 700 featured a rigid beater bar which was used in combination with the brush on the agitator to dislodge dirt from the carpet.

19. The New Consumer
What were some of the qualities of the new consumer of the 1920’s?
How did advertising change the American marketplace?
How was the public hurt and helped by advertisements?
Do you think Americans would have bought as many appliances if they had not been advertised?

20. New Ways To Pay
In the early 1900s, most Americans paid for items in full when they bought them, perhaps borrowing money for very large, important, or expensive items like houses, pianos, or sewing machines.
Borrowing was not considered respectable until the 1920s, when installment buying, or paying for an item over time in small payments, became popular.
They bought on credit, which is, in effect, borrowing money.
Consumers quickly took to installment buying to purchase new products on the market.
By the end of the decade, 90 percent of durable goods, or long-lasting goods like cars and appliances, were bought on credit.
Advertisers encouraged the use of credit, telling consumers they could “get what they want now” and assuring them that with small payments they would “barely miss the money.”

21. Weaknesses in the Economy
Though the “Roaring Twenties” brought prosperity to many, other Americans suffered deeply in the postwar period
Farmers
American farmers who had good times during World War I found demand slowed, and competition from Europe reemerged.
The government tried to help in 1921 by passing a tariff making foreign farm products more expensive, but it didn’t help much.
Natural Disasters
Boll weevil infestations ruined cotton crops.
The Mississippi River flooded in 1927, killing thousands and leaving many homeless.
“The Big Blow,” the strongest hurricane recorded up to that time, killed 243 people in Florida.
Land Speculation
In Florida, the wild land boom came to a sudden and disastrous end.
Florida sank into an economic depression even as other parts of the nation enjoyed prosperity.

22. Weaknesses of the Economy
What were some of the weak parts of the economy in the 1920’s?
Why did American agriculture suffer after World War I?
How did low prices for crops affect farmers?