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Economic boomAmerica's economy boomed in the early 20th century. The Republican presidents adopted a laissez-faire policy but not everyone benefited from the prosperity. The United States of America had an essential supply of natural resources such as timber, iron, coal, minerals, oil and land. Immigrants provided a
plentiful and cheap work force to utilise these resources. This enabled America to become a huge economic power at the beginning of the 20th century. These resources were an important foundation for the economy. Whilst European economies suffered during the First World War, the USA experienced significant growth. US banks loaned money to Europe and businesses sold much
needed goods. The war also provided a stimulus for inventions in production, materials and advertising. Immediately after the war there was a small slump but from 1922 the USA experienced an unprecedented economic boom. Electricity developed slowly before the war but during the 1920s the electricity industry experienced a huge
boom. By 1929 the majority of houses in America had electricity and 70 per cent of them used it for lighting purposes. As a result of the development of factories to produce consumer goods for the American
people, the demand for electricity doubled. Electrical power was introduced in factories to drive machinery, and thus it became possible to introduce mass production to a number of factories, eg
refrigerators, washing machines, vacuum cleaners and radio sets. The car industry is the best example of mass production during the period. Henry Ford was a pioneer with
his idea of producing affordable cars for the people of America. He set about realising his dream by producing his early cars in small workshops. He had groups of men working for him and gradually the cars were built. Henry Ford and his son posing in the Model F Ford car in 1905 Henry Ford's hard work bore fruit. As he produced more and more cars, he could reduce his prices. By 1925 the price of a car was around $290, which was much cheaper than the price of $850 in 1908. Henry Ford was of the opinion that it was better to sell more cars for a small profit, as that meant employing more workers. By 1929 Americans owned 23 million cars. The workers earned good wages ($5 per day), thousands of jobs were created and roads, petrol stations, hotels and restaurants were built. Therefore the entire economy was given a substantial boost due to the car industry. In order to help American people to purchase the new goods that were available, systems of hire-purchase and credit were introduced. This meant that a person could buy something by paying for it on a monthly basis. As a result, the majority of Americans could afford expensive goods. In order to encourage Americans to take advantage of the scheme, advertisements were placed on roadsides, on the radio, in newspapers and in cinemas. During the same period, chain stores appeared for the first time, eg J P Penney. Catalogue shopping also became fashionable as it was a convenient way of buying goods. Causes of the economic boom
GCSE Subjects
Who was responsible for the creation of welfare capitalism?The 19th century German economist, Gustav von Schmoller, defined welfare capitalism as government provision for the welfare of workers and the public via social legislation.
What helped drive the mass production of the 1920s?In general, in manufacturing there was a rapid rate of growth of productivity during the twenties. The rise of real wages due to immigration restrictions and the slower growth of the resident population spurred this. Transportation improvements and communications advances were also responsible.
Which industry had the greatest impact on the economy in the 1920s?The American economy's phenomenal growth rate during the '20s was led by the automobile industry. The number of cars on the road almost tripled between 1920 and 1929, stimulating the production of steel, rubber, plate glass, and other materials that went into making an automobile.
What did the presidential election of 1924 in which Calvin Coolidge defeated John W Davis and Robert La Follette reveal about American voters quizlet?What did the presidential election of 1924, in which Calvin Coolidge defeated John W. Davis and Robert La Follette, reveal about the priorities of American voter? The election results revealed voters' lack of support for labor unions, the regulation of business, and the protection of civil liberties.
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Who funded the rapid growth of radio in the united states between 1922 and 1929?
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