What factors caused the economic boom?

1. What factors caused the economic boom? Introduction Industrial strength The First World War Republican policies New industries and new methods A state of mind

2. Introduction In the USA, it seemed that everything was booming in the 1920’s. In the following slides, some of the various reasons of that economic boom are going to be explained.

3. Industrial strength The USA was a vast country, with a growing population and was rich in natural resources. Because of this, it didn’t need to import raw materials or goods from other countries. In other words, it was self-sufficient. During the First World War, almost all of the USA’s industries were leading the world. They were selling lots of their products in the USA, and they also imported some of them to Europe, Latin America and the Far East. The farmers had become very successful as the whole USA did, but when WW1 ended they were overproducing. This meant that they produced more than they could sell, and this was a serious problem. But anyway the Americans were confident enough that agriculture and industry were growing anyhow.

4. Natural resources and industrial centers of the United States during the 1920s.

5. The First World War The money USA lent to the Allies and the weapons and munitions they traded with Great Britain and France, gave the American Industry a real boost. When the First World War came to an end, USA was much better than the successful German chemical industry. This recent industry produced plastic and other new materials. Historians call the period of change and growth the “USA’s 2nd Industrial Revolution”.

6. Republican Policies From 1920 to 1932 all the US presidents were Republicans, the Republicans also dominated the congress. Their policies were: • Laissez-Faire • Tariffs • Low Taxation • Trusts

7. 1) Laissez-Faire They believed that the government should interfere as little as possible in the everyday lives of the people.

8. 2) Tariffs They also believed in import tariffs which made it expensive to import foreign goods. These tariffs protected businesses against foreign competition and American companies started to grow faster.

9. 3) Low Taxation The republicans kept taxation as low as possible, so people had more money to spend on American goods or reinvest their money in industries.

10. 4) Trusts They allowed the development of trusts, that were huge super-corporations that dominated the industry. Wilson and the Democrats had fought against trusts, because they did not want big corporations to have almost complete control of one vital sector of industry.

11. New Industries, new methods Through the 1920s new industries and new methods of production were developed in the USA. Steel, Chemicals, Glass and Machinery were made from raw materials. These products became the foundation of an enormous boom in consumer goods. The big industries started using sophisticated sales and marketing techniques to get people to buy their goods. The most important of these new industries was the motor-car industry, by the end of the 1920s the motor industry was the biggest industry. It employed hundreds of thousands of workers directly and it kept workers in other industries in employment. The glass, leather, steel and rubber industries were essential to build new vehicles.

12. A state of mind Most of the Americans believed that they had a right to prosperity. They wanted to have a nice house, a good job and plenty to eat, and to have in their houses the latest consumer goods. Consuming more and more was a characteristic of being an American. Before the 1920s being careful with money and saving it was seen as a good quality but during the 1920s the Americans thought that spending money was seen as the right thing to do.