1. Rise of the American Economy
Learning Objective: To understand the reasons for the economic ‘boom’ in 1920s America.

2. Boom Boom Boom Learning Outcomes: Explain what an ‘economic boom’ is
Identify what caused an economic boom in the USA
Evaluate the reasons for the boom and decide which was most important.

3. What is an economic boom?
An economic boom is a rapid growth in a countries money making that leads to greater prosperity (wealth)
In America, this growth was based around consumer goods – luxury goods that people wanted to buy but didn’t really need.

4. Consumerism

6. Consumer Goods in America
1919
1929
Cars
9 Million
26 Million
Radios
60,000
10 Million
Telephones
20 Million

8. Why did America Boom? World War I Industrial Strength
Government Policies
A State of Mind
New Industries

9. World War One
American Industry benefited from selling war goods to Britain and France (food, munitions).
The war was fought in Europe – Hugely disrupted British and French economies as resources had to be diverted for the war effort.

10. World War One
Many Countries ended up borrowing huge sums of money from the USA – At the end of the war Britain owed America £900 million.
America took over European overseas markets – eg. America took over Germany as leading exporter for chemicals.

11. Industrial Strength America had large Natural Resources. Oil – Texas
Coal – Kentucky
Iron – Chicago
America had good farming (agriculture)
Cattle Ranching - Colorado

13. US Exports 1914-1917 ($ Millions)

14. Government Policies
Laissez Faire – Means leave alone. Republicans believed that if the government didn’t interfere with peoples lives then they would be free to make money.
Tariffs – Taxes placed on imported goods which forced Americans to buy American goods. E.g. Fordney-McCumber tariff (1922).

15. Government Policies
Low Taxes – so people had more money to spend thus helping the economy grow.
Rugged Individualism – People achieve success by their own hard work.
Term used by President Herbert Hoover

16. A State of Mind
Americans felt so confident that in the 1920s they started to borrow money to buy goods. Companies increasingly offered ‘Hire Purchase’ (or ‘credit’).
People also began to buy shares ‘On the margin’, which meant that bought shares by only paying 10% of their value.
Eg. Pay for a car in instalments

17. New Industries
The 1920s saw a dramatic change in American society, for example:
Henry Ford ran the Ford Motor Company. It made the most famous car in the 1920s – The Model T
By 1929 they were making more than 1 car a minute.
This was made possible by mass production and the use of the assembly line – The cars were moved along whilst workers did repetitive tasks all day (it might be your job to put on the wheels).

19. More people had jobs Prosperity Older industries grow Steel
More cars were made
New Opportunities
Older industries grow
More parts are needed
Prosperity
Steel
Glass
Rubber
Leather
Petrol Stations
Motels
Road building

20. Was the Boom a good thing for Americans?
Plenary
What caused the Boom?
What did the Boom create?
Who helped kick start the Boom?
Complete your own concept map on the ‘Economic Boom’. Use the words in the box to help you. The images will help you start.
Economic Boom
Consumerism Radio Cars
Refrigerator Republicans
WW Exports Industry
‘Hire Purchase’ Confidence Jobs
Opportunities Resources Oil
Coal Agriculture