Why did America boom in the 1920s?

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Why did America boom in the 1920s?
A very brief set of notes
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Why did America boom in the 1920s?
What is an economic boom?
Why did it happen?
Did everyone benefit?

• This presentation will look at 3 main areas
• What is an economic boom?
• Why did it happen?
• Did everyone benefit from it?
• To return to the start click the logo.

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What is an economic boom?
What is an economic boom?
Why did it happen?
Did everyone benefit?

• A rapid growth in a countrys money making that
  leads to increased prosperity (wealth).
• The economic boom in America was based around
  consumer goods luxury items that people wanted
  to buy but didnt really need.

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Examples of consumer goods
What is an economic boom?
Why did it happen?
Did everyone benefit?
Other consumer goods included nylon stockings
and fridges
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Why did America boom?
What is an economic boom?
Why did it happen?
Did everyone benefit?

• Industrial Strength
• World War One
• New Ideas and Industries
• Republican Policies
• Confidence

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Industrial Strength
What is an economic boom?
Why did it happen?
Did everyone benefit?

• America had large natural resources
• Oil Texas
• Coal Kentucky
• Iron Chicago
• America had good agriculture (farming)
• Cattle ranching Colorado

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World War One
What is an economic boom?
Why did it happen?
Did everyone benefit?

• American industry had profited by selling war
  goods to Britain and France
• The disruption to British and French industry
  allowed America to become the worlds leading
  exporter
• America only joined the war in 1917 so had not
  suffered so badly in contrast, by 1918 Britain
  owed the USA 900 million.

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New Ideas and Industries
What is an economic boom?
Why did it happen?
Did everyone benefit?
The 1920s saw a dramatic change in American
industry, for example

• Henry Ford ran the Ford Motor Company. It made
  the most famous car of the 1920s the Model T
  Ford.
• It was slow, ugly and nick named the Tin
  Lizzie.
• However, by 1929 they were making more than 1 car
  a minute at the Red River plant. It was
  successful because it was cheap.
• Mass Production every part was standardised
  (only one colour and choice of engine), the cars
  were put together on a production line. The cars
  were moved along while workers did simple
  repetitive tasks, for example you might put on
  wheels all day. This unskilled workers could be
  paid less.
• Mass production was cheap and quick.

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Cycle of Prosperity
What is an economic boom?
Why did it happen?
Did everyone benefit?
More cars were made
petrol stations
More parts were needed
New opportunities
motels
steel
road building
Other industries grew
glass
More people had jobs
leather
rubber
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Republican Policies
What is an economic boom?
Why did it happen?
Did everyone benefit?
To be President in the 1920s was to be a
Republican. Some of the policies followed by
Harding, Coolidge and Hoover were

• Laissez Faire French phrase meaning leave to
  do. Republicans believed that if government did
  not interfere in peoples lives then they would
  be free to make money.
• Tariffs taxes placed on imported goods so that
  there was less competition for US businesses
• Low Taxes so people had more money to spend,
  for example on consumer goods. Republicans
  believed this would help the economy grow.
• Trusts large companies were allowed to control
  whole industries. For example, Carnegie
  controlled the steel industry. It was believed
  that this would lead to them becoming more
  successful and efficient.

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Confidence
What is an economic boom?
Why did it happen?
Did everyone benefit?
All of these factors (reasons) helped make
Americans feel more confident. This confidence
led them to spend more, which in turn made the
economy grow even faster. Americans in the 1920s
were confident enough to start borrowing money to
buy goods. Companies increasingly offered hire
purchase where consumers could buy now, pay
later. For example, you could hire a car for a
long period of time, once you had paid enough
money the car would become yours.
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Did everyone benefit from the boom?
What is an economic boom?
Why did it happen?
Did everyone benefit?

• The simple answer is no. In the 1920s nearly half
  of all Americans lived in rural areas (the
  countryside). During this time agriculture
  (farming) was actually suffering.
• Farm Incomes dropped from 22 billion in 1919 to
  13 billion in 1928
• There were several reasons for this
• Tariffs reduced trade with other countries
• World War One meant that Europe couldnt 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. For
  the first time, more Americans were living in
  cities than in the countryside.

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Did everyone benefit from the boom?
What is an economic boom?
Why did it happen?
Did everyone benefit?
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
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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 of people.
Therefore, nearly half of all Americans were too
poor to take part in this consumer good based
boom.