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America in the 1920s: Economy and Industry - Juan, Gunnar, and Cruz
Transcript of America in the 1920s: Economy and Industry - Juan, Gunnar, and Cruz
During the 1920s, America's economy and industry led to the largest economic boom America had ever experienced. There are many key factors of this economic boom, many of which include America's new industrial strength and techniques, benefits from the First World War, new Republican policies, and a state of mind of prosperity.
What was the American Economic Boom of the 1920s?
A Republican president, named Warren Harding, was elected on 1920, promising to return normal life to citizens as it had been before the First World War. Over the next ten years, the USA, already the richest country in the world, became richer as its economy boomed. Historians have called this growth and change 'USA's second industrial revolution' because of how successful it was.
New Industries and Methods: Motor-Car Industry
The most important of these new booming industries was the motor-car industry. Car production was revolutionized by Henry Ford, who set up the first moving production line in the world in 1913, in Detroit. The most famous of these newly-produced cars was the Model T. More than 15 million were produced between 1908 and 1925. In 1927 they came off the production line at a rate of one every ten seconds. In 1929, 4.8 million cars were made.
Benefits from the First World War
Throughout the war, the USA lent money to the Allies and sold arms, munitions, supplies, and food to Britain and France. This one-way trade gave American industry a real boost. In addition, while the European powers fought the war in France, the Americans were able to overtake Europe's industry and trade around the world. The war stopped Europe's
New Industries and Methods
Through the 1920s new industries and new methods of production were developed in the USA. The country was able to exploit its vast resources of raw materials to produce steel, chemicals, glass and machinery. These products became the foundation of an enormous boom in consumer goods. Telephones, radios, vacuum cleaners, and washing machines were mass-produced on a vast scale, making them cheaper so more people could buy them.
America in the 1920s: Economy and Industry
by Gunnar Schlegel, Cruz Schlegel, and Juan Leal
The most important factor of the economic boom of the 1920s is definitely the industrial strength of the USA, and its different growing industries and new methods and techniques of producing and selling consumer goods efficiently. The USA was a vast country, rich in natural resources and with a growing population. American agriculture was the largest and most efficient in the world.
The home market was large and growing. The USA had massive steel, coal, and textile industries. It was the leading oil producer and it was foremost in developing new technologies such as motor cars, telephones, and electric lighting. New industries, such as chemicals, were also growing, and its new film industry already led the world.
At the same time, the big industries used sophisticated sales and marketing techniques to get people to buy their goods. Mass
nationwide advertising was utilized; poster advertisements, radio advertisements and traveling salesmen encouraged Americans to spend.
industries in its tracks in order to focus on the battle, which allowed the USA to leave behind European industry. Plastics and other new materials were produced. When USA finally joined the fighting, it was not in the war long enough for it to drain American resources the way it drained Europe's. By 1922 the American economy was growing fast once again.
Republican Government Policies
Another significant key factor of the economic boom was the policies of the Republican Party. Listed below are some of their beliefs.
American agriculture became the most efficient and productive in the world after the economic boom. In fact, farmers had become so successful that they were producing more than they could sell, which later became a serious problem. During the First World War, American farmers made record profits. They were able to supply both the USA and the European powers on a regular basis. Britain relied on imports of foreign food to feed its population, which gave American agriculture a huge boost.
A State of Mind: Prosperity
Growth of Cities
How Did the Economic Boom Impact Americans?
Republicans believed that the government should interfere as little as possible in the everyday lives of people. In their view, the job of the President was to leave citizens of the USA alone - to do their jobs. That was where the state of mind of prosperity came from. This attitude is called 'laissez-faire'.
Republicans believed in import tariffs, which made it more expensive to import foreign goods. These tariffs protected businesses against foreign competition and allowed American companies to grow even more rapidly. The home market was large and growing. This, however, also led to the USA closing its borders to foreign immigrants.
Republicans kept taxation as low as possible. This brought benefits to both working people and wealthy people. Republicans believed that if people could keep as much money as they could, then they would spend it on American goods and wealthy people would reinvest their money in industries.
Republicans allowed the development of trusts, which were super-corporations that dominated industry. Woodrow Wilson and other Democrats had fought against trusts because they believed it was unhealthy for people to have almost complete control of certain vital sectors of industry. Republicans allowed trusts to do what they wanted, since they believed that skilled industry owners would know better than politicians about what was good for the USA in this certain aspect of the economy and industry.
One thing runs through all of the key factors of the economic boom, which is an attitude, or a state of mind. Americans believed they had the right to prosperity. This meant that, for Americans, it was a main goal in life to have a nice house, a good job, and plenty to eat, and for their homes to be filled with the latest American consumer goods. Consuming was now seen as a part of being American. In the 1920s, people began to consider spending money a good quality in a person.
In 1920, for the first time in American history, more people lived in towns and cities than in the country. Skyscrapers were built because no more land was available. Throughout the 1920s, there was tension between rural USA and urban USA. People in the country thought that their traditional values, which emphasized religion and family life, were under threat from the growing cities, which they thought were full of atheists, drunks, and criminals.
The Federal Road Act of 1916 began a period of intense road building all over the country. Road building employed more people than any other industry in the USA for the next ten years. During the 1920s, the total extent of roads in the USA doubled. The new roads also gave rise to a new truck industry. In 1919, there were 1 million trucks in the USA, which increased significantly to 3.5 million by 1929.
Electricity pylons were erected all over America. In 1918, few homes had electricity. By 1929, almost all urban homes had it, although not many farms were on the electricity supply grid.
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Many Americans were definitely enjoying the economic boom, but there were some people who did not benefit from this movement at all, especially farmers and industry workers. There were dramatic changes that impacted their lives significantly - in a negative way.
Farmers were most definitely impacted very negatively by the economic boom. Total US farm income dropped from $22 billion in 1919 to just $13 billion in 1928. After the war, Europe imported less food from the USA, both because Europe was poor and because it was partly a response to the implementation of US tariffs, which stopped Europe from importing to the USA. USA's population growth was slowing down and restrictions were imposed on immigration.
Underlying all these problems, however, was overproduction. American agriculture had become extremely efficient, and by 1920, it was producing surpluses that nobody wanted. Prices plummeted as desperate farmers tried to sell their produce. Problems in farming directly affected over 60 million Americans. Six million rural Americans, mainly farm laborers, were forced off the land in 1920. This was a very serious issue.
Not all farmers were affected by these problems, however. Rich Americans wanted fresh vegetables and fruit throughout the year. Shipments of lettuce to the cities, for example, rose from 14,000 crates in 1920 to 52,000 in 1928. Nevertheless, these were times of hardship for most farmers.
Workers in many older industries, such as coal, leather, and textiles, did not benefit much either. Many of these industries suffered from competition from newer industries, such as oil and electricity. They suffered from the development of man-made materials. Some workers barely had enough money to live on. Throughout this period, unemployment also remained a problem, which increased with the economic boom's impact on farming. The growth in industry in the 1920s did not create many new jobs. Industries were electrifying or mechanizing production. These millions of unemployed Americans were clearly
not sharing in the boom. Poverty struck America even harder. On top of that, the Republican attitude 'laissez-faire' prevented the government from interfering, which included not doing anything about unemployment or poverty.
Middle-class and upper-class people were definitely enjoying the economic boom. 29% of middle-class and upper-class people owned a car. Most stores were in middle-class districts. Upper-class people went to the more luxurious town-center cinemas. These wealthy Americans also reserved themselves to the right of prosperity. They had nice homes, good jobs, plenty to eat, and could buy all of the latest American consumer goods. This was the type of life that
every American dreamed of. Wealthy Americans invested their money into big industries, companies, and trusts, which brought in great profit for them.