A Growing Economy. What is an economic boom?. A rapid growth in a country’s moneymaking that leads to increased prosperity. The economic boom in America was based around consumer goods – luxury items that people wanted to buy but didn’t really need.
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that leads to increased prosperity.
around consumer goods – luxury items
that people wanted to buy but didn’t really need.
• Made $$$ by selling weapons and arms to the European Allies.
• While Europe fought, the USA took over many of their colonial markets.
• US chemical industry replaced the German industry as world leader
• World’s leading industrial nation.
• Population hard working and ambitious.
• The early 1900s ‐‐ movement from rural
and agricultural to urban and industrial.
increased by 50% during the 1920s.
• Boom fuelled by a demand for ‘new’
– E.g. washing machines, refrigerators, radios and
• Most significant was the growth in the MOTOR INDUSTRY.
• Assembly Line and Mass Production – make goods
• 1925 Ford were producing a car every 10 seconds
• this pushed down prices and made goods more
accessible for ordinary people
• Also meant workers could be paid less – unskilled work, repetitive tasks.
• Give Big Business what it wanted.
• Businessmen believed low taxes gave people more money to spend.
• Government also introduced tarriffs on foreign goods coming into America to protect America’s industry.
the easy availability of credit.
• Consumers could buy the goods with a
small deposit, and then pay the rest off in
weekly or monthly installments. 6 out of 10
cars were bought this way.
• Employers allowed to use violence to break strikes
and to fire union members
• Unions were excluded altogether from auto industry.
• Employers were able to keep wages low and working hours long, at a time when profits were increasing
• Americans confident enough to start borrowing
money to buy goods. Credit: ‘Buy now, pay later’.
• Wall Street boomed (a 'bull' market) with many
people buying shares to make a profit. Many new
businesses were 'floated' on the stock market.
Chaplin, the ‘talkies’ and cinemas, jazz clubs
• Skyscrapers, highways and urban development.
sex appeal to
these signal a shift in
the culture of the
boundaries further today?
registered in the U.S. (1 car per 4.9 Americans)
however, and there were glaring weaknesses
in the American economy in the 1920s.
• However, there is plenty of evidence that all
was not well with the American economy in
the 1920s, and in 1928 the 'boom' began to slow down.
Farm Incomes dropped drastically for several reasons
•World War I meant that Europe couldn’t 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.
Hoover to say:
poverty than ever before in the history of any land”
-- Only 10% of wealth went to the poorest 42%
-- Therefore, close to half of all Americans were too
poor to take part in this consumer good based boom.
boring while alienating workers.