The Rise of the US Economy

1910-1929

What were the causes of the

economic boom?

Why did a boom happen in America during the 1920s?

America’s assets and development

US: Timber, iron, coal, mineral, oil and land all availableHire-purchase and credit developed to assist public in the purchase of goods (a way of borrowing money, get goods, pay for item slowly)

Expensive goods become affordable and advertising encourages consumerism

America’s assets and development

Chain stores appear for the first time and catalogue shopping becomes popularElectricity experiences a boom: By 1929 majority of homes have power 70% use this for lighting Electricity introduced into factories for machinery purposes, which drives production forward, resulting in ‘mass production’

Vacuum CleanersRadiosRefrigerators Washing machines

America’s assets and development

Car industry best example of mass production (Henry Ford)

As Ford produced more cars, cost of production decreased, resulting in price of car decreasing and greater public demand of the good. By 1925 cost of a car $290, compared with $850 in 1908. By 1929 America home to 23 million cars. Workers earned good wages, jobs were created, public infrastructure increases= economic boost

Attitude and Policy of the Republican Presidents

Three Republican Presidents led the US through the 1920s (Harding, Coolidge and Hoover)

They followed a policy of Laissez-Faire Economics: leave the economy alone- allowing for business to expand without government control

Warren Harding (1921-1923)

“Return to Normality” Reduced taxes to give business more moneyIn 1922 imposed a tax on foreign goods known as Fordney-McCumber Tariff Act- made American goods more affordable and likely to be purchased by US citizens This policy is known as“protectionism”

Calvin Coolidge (1923-1929)

“Business is America’s Business”

Maintained Harding’s policyAdhered to Laissez-Faire policyDidn’t do very much (Known as ‘Silent Cal’)

Herbert Hoover (1929-1932)

“Put a chicken in every cooking pot and a car in every garage”

Believed in Laissez-Faire but also Rugged Individualism (Freedom to succeed, individuals responsible for themselves)

People should not depend on government for help, should solve own problems through hard workLost the 1932 election

The effect of prosperity upon

American society?Industrial growth doubledHousehold electrical goods expanded (in 1919 60, 000 radio sets sold compared with 10 million in 1929)Building industry busier, new office spaces in high demand leading to development of the skyscraper

Influence of the car industry

Assembly line manufacturing developed7500 cars produced daily as a resultConstruction of new roads eventuates, suburbs as well as ability to live further away from work, take vacations.

Groups that did not prosper

Compare and contrast