From War to Peace19.2 A New Economic Era

Ford Revolutionizes Industry

The first cars in America appeared in the 1800’s but remained a toy for the rich through the early 1900’s

During the 1920’s, the Model T appeared and became a fixture of American life

The Model T

The Assembly Line

Custom-made cars were extremely expensive to build . . .› Ford had to come up with a way to make production

cheaper if he wanted to create a “motor car for the great multitude”

Enter the Assembly Line!› A production system in which the item being built

moves along a conveyor belt to various workstations On Ford’s assembly line there were eighty-four specific

jobs In it’s first year, the Ford assembly line produced a car

every hour and a half Ford’s employees made an average of five dollars per

day, enabling them to buy cars

The Conveyor Belt

“The man who puts on a bolt does not put on a nut. The man who puts on the nut does not tighten it.”

The Model T

The car sold for under $500, about half the cost of the first Model T’s

The price still wasn’t cheap, but many more people could afford it

By the 1920’s, Ford was rolling out a car every minute and the price had dropped even lower

By 1922, twenty-two million cars were rolling along the unpaved roads of the nation

The Effect on Industry

During the first quarter of the century, Ford dominated automaking, but in the 1920’s Chrysler and General Motors began to improve upon Ford’s design

Competition in the industry led to vast economic growth, and other industries also learned from Ford and his assembly line

Welfare Capitalism

The success of business in the 1920’s led to a growth of what is called ‘welfare capitalism’ in an effort to defeat organized labor› A system in which companies provide

benefits to employees in an effort to promote worker satisfaction and loyalty. Health insurance Pensions/Retirement plans

Industry Changes Society

Demand for steel, glass, rubber, etc all increased

Repair shops began to spring up

Motels and restaurants arose to meet the needs of travelers; this produced a new industry - tourism

Gas became a hot commodity

Suburbs began to pop up everywhere

The auto industry put the city of Detroit, MI - where Ford’s manufacturing operations were located - on the map . . . › In 1910, fewer than 500,000 people lived there; within twenty years the

population had tripled

Th

e N

ew

Con

su

mer

New

Pro

ducts

New

Ways to

Pay

Electrical appliances› Refrigerators› Vacuums› Radios

Passenger airplanes

Installment buying› Paying for an item over time in small

payments instead of paying for an item in full › ‘Credit’ a.k.a. borrowing money with a

promise to re-pay› By the end of the decade, consumers bought

ninety percent of durable, long-lasting goods (i.e., cars and appliances) on credit

Weaknesses in the Economy

The era that brought the boom in cars, consumer goods, radio, and advertising earned the nickname ‘The Roaring Twenties’

The farmers, however, did not get to take part in the fortune the rest of the nation was enjoying› European farmers drove down US prices› Insects infested and destroyed cotton crops in the

South› The Mississippi River flooded, drowning crops in the

South› “The Big Blow”, the strongest hurricane recorded up to

that time occurred in Florida One of the most destructive hurricanes ever

Assignment: Reviewing Ideas, Terms, and People (Pg. 633)

1. What was the assembly line? How did it affect Ford’s ability to make automobiles?

2. What was the effect of the boom in the auto industry on other industries? Why could industrial changes be said to change the map of the United States?

3. Write a brief definition for each of the following terms: installment buying, credit

4. What change occurred in consumer attitudes in the 1920’s compared to earlier times? How did the changes in consumer behavior make possible the growth of the American economy in the 1920’s?

5. What part of the American economy did not enjoy prosperity in the 1920’s?