A growing economy
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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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What is an economic boom
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.

On what factors was the economic boom based
On what factors was the economic boom based?

  • 1. First World War

  • 2. USA’s wealth

  • 3. New industries

  • 4. Rising wages and stable prices

  • 5. Government policies

  • 6. Hire purchase

  • 7. Weak Unions

First world war
First World War

  • USA entered late and had no damages to repair

    • 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

  • During the war, became the ‘banker to the rest of the world’

The usa s wealth
The USA’s wealth

  • Rich in raw materials and had much fertile


    • World’s leading industrial nation.

    • Population hard working and ambitious.

    • The early 1900s ‐‐ movement from rural

    and agricultural to urban and industrial.

New industries
New Industries

  • The total production of American industry

    increased by 50% during the 1920s.

    • Boom fuelled by a demand for ‘new’

    consumer goods.

    – E.g. washing machines, refrigerators, radios and

    vacuum cleaners.

    • Most significant was the growth in the MOTOR INDUSTRY.

Rising wages and stable prices
Rising wages and stable prices

  • Incomes rose 25% ; prices remained the same or


    • Assembly Line and Mass Production – make goods

    more cheaply.

    • 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.

Consumer goods prosperity in the usa in the 1920s

  • In just ten years there was a huge increase in production.

  • It was a boom in CONSUMER GOODS, that is goods, which people bought and used


Government policies
Government Policies

  • Laissez‐faire was economic policy favored by


    • 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.

A growing economy

  • 'The business of America is business.‘

  • 'The man who builds a factory, builds a temple. The man who works there,

  • worships there.'

  • ‐‐ President Coolidge

  • We in America today are nearer to the financial triumph over poverty than

  • ever before in the history of our land. The poor man is vanishing from us.

  • Under the Republican system, our industrial output has increased as never

  • before, and our wages have grown steadily in buying power.

  • ‐‐ President Hoover, speaking in 1928

  • During his election campaign, Republicans promised 'a chicken in every pot and a car in every backyard'.


  • The consumer boom was encouraged by

    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.

Weak unions
Weak Unions

  • The Republican government and business against

    trade unions.

    • 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

Result confidence
Result: Confidence

  • This confidence led them to spend more, which in turn made the economy grow even faster.

    • 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.

New society consumers
New Society ‐ Consumers

  • Entertainment industry – Hollywood, Charlie

    Chaplin, the ‘talkies’ and cinemas, jazz clubs

    and speakeasies.

    • Skyscrapers, highways and urban development.


  • Advertisers used

    persuasion, ploy,

    seduction and

    sex appeal to

    lure buyers.

  • How do

    advertisements like

    these signal a shift in

    the culture of the

    United States?

  • Have advertisers

    pushed the

    boundaries further today?

The automobile
The Automobile

  • Freedoms, luxuries and privacy.

  • Automobile Industry provided over 6 million new jobs!

  • By 1929, 26 million motor vehicles were

    registered in the U.S. (1 car per 4.9 Americans)

Poverty and depression
Poverty and Depression

  • Not every one shared in the prosperity,

    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.


  • Agriculture suffering.

    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.

  • As a result, millions left for the cities.


  • The booming American economy in the 1920s led President

    Hoover to say:

  • “we in America today are nearer to the final triumph over

    poverty than ever before in the history of any land”

  • But there was still great inequality.

    • 32% of the wealth went to the richest 5% of people.

      -- 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.

Labor mass production deskilling
Labor: Mass Production = Deskilling

  • Deskilling: term used by labor supporters to describe mass production techniques;

  • Jobs become more repetitive and

    boring while alienating workers.

    Wages dropped.