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America's economic boom post WW1

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James Brown

on 4 May 2013

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Transcript of America's economic boom post WW1

Wartime Loans Supplying wartime countries Holding back from the war Material wealth Returning soldiers raising demand New Industries Wages increased and prices fell Low government interference in the economy Hire purchase readily available Traditional Industries did not grow. Agricultural industry collapsed. Income increases. Effects Causes America's Economic boom post WW1 War Based New Technology Both of which increases demand, causing the economy to grow. America joined the war late, this meant that America was not crippled economically by massive debt, allowing her markets to expand into other countries, thus increasing economic growth. America lent large amounts of money to the Allies. This put America on a very strong economic footing by the end of the war. Total production of American industry increased by 50% in the 1920s. New electrical goods such as washing machines came into demand. The chemical industry created new materials such as rayon, creating more jobs required to produce them. Motor car industry grew; such as Ford and General Motors More jobs are available; The economy grows in size. Prices fell due to the assembly line, the price of the Ford Model T fell from $850 to $260. While this was occurring wages were steady or on the rise. People could afford to buy more goods, thus increasing the demand and growing the economy. America was rich in fertile land, iron and other such raw materials, this allowed primary businesses to easily and quickly add wealth into the American economy. This made it easier for people to buy expensive items and pay it off later in installments, thus increasing demand. This came in the form of lower taxes and tariffs on foreign imports. This created less competition for American businesses in the large American market and left more money for the businesses to re-invest, allowing faster growth thus boosting their economy. The ones left behind Traditional Industries such as boat building or coal mining already had an established client base and so were slower to expand and were pushed aside by the newer industries. The tariffs on foreign goods caused countries to tariff American imports. This shrunk the demand for agricultural goods. The farmers produced more or the same amount. This lowered prices and shrunk the farmers income. Farmers earned, on average, on third of the average earnings. Roots of the depression Cashing in of wartime loans USA started cashing in it's wartime loans to the UK. UK used the wartime reparations from Germany to repay. This backfired when the German economy hyper inflated and collapsed causing shock waves all around the world This caused the people of America to engage in mass stock speculation, the system collapsed resulting in black Tuesday. Together these were enough to bring about the great Depression; continuing the economic cycle. } Lower class workers / minorities did not benefit. 60% percent of the population still lived below the poverty line. Electricity had replaced many of the lower class jobs. Native americans living on reservations found it hard to make a living on such poor land. The black population suffered from employment discrimination. One third of all income was earned by 5% of the population. Links to the Great Gatsby The Valley of Ashes and the Wilsons are both examples of the 45% of American living below the poverty line around 1929. The richer proportion of the population can be seen through the excessive spending and exorbitant life style of the richer inhabitants of the west egg. _ “I’m going to give you this dress... I’ve got to get another one tomorrow.” 
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