1920s
Why there was an economic boom in 1920s
WW1
● When WW1 broke out in Europe, USA stayed out of it as part of policy known as isolationism
● Most politicians wanted to avoid involvement in European quarrels in case America got
dragged in an expensive foreign war that would cost American soldiers’ lives
● Staying out of first 3 years allowed USA to prosper financially - American banks loaned
money to Britain and its allies used to buy food weapons and equipment mainly from USA
● Created many jobs in America and made lots of business people very rich
● Before war, Germany had been world’s leading manufacturer of chemicals, dyes and
medicines - war disrupted this
● Soon, American chemical industry was outproducing Germany’s and by end of war USA led
world in production of medicines, dyes and other materials eg. bakelite, cellophane
Aftermath
● USA eventually joined war on Britain’s side in 1917 and although 100k+ American soldiers
died fighting, America faced much smaller impact than on Europe
● Europe had been exhausted by war while USA was untouched by fighting - produced high
percentage of world’s basic goods
● Skilled inventors and business people now able to exploit these resources and make fortunes
● America also was only major nation not faced by huge wartime debts - other countries owed
them money eg. Britain, Germany
Consumer society
● In 1916, only 15% of American homes had electricity - nearly 70% of homes by 1927
● Meant workers could spend their money on ultra-modern electric-powered “gadgets'' recently
invented eg. vacuum cleaners, refrigerators etc
● Huge demand for these goods created jobs in manufacturing factories
Help from Republican government
● To help American businesses, Republican government introduced several new policies
● Eg. Fordney-McCumber Tariff Act - put high import duties, making foreign-produced goods
more expensive so customers choose American-made products by price
● Government also cut taxes on rich people and companies - could start more companies and
create more jobs
● Low taxes also meant people had more money to spend on range of new products available
● Republicans believed in policy of “laissez-faire” - businesses should be left alone to get on
with process of creating wealth
Growing industries and mass production
● Growth of motor industry was massive boost to US economy
● Carmaking used 20% of America’s steel, 65% of its leather and 75%+ of its rubber and glass
● More jobs created in these industries as more cars were made
● American business people were quick to see advantages of using latest technology to
produce goods - before long, many other industries were using assembly lines
● Assembly lines: products are built bit by bit by different people (leads to mass production)
● As companies got better and quicker at making goods, they got cheaper
New ways to buy and sell
● Desire to own new consumer goods increased by advertising campaigns
● Colourful billboards, newspapers and magazines urged people to buy the latest gadgets
● For those who didn’t live near large shopping town, catalogue could be delivered to door - can
buy almost anything
● Cinemas and radios broadcast advertisements, encouraging people to use “buy now, pay
later” schemes (hire purchase plan)
,Cycle of prosperity
Importance of Henry Ford
Henry Ford
● By 1911, realised needed to produce cars more cheaply and efficiently to make more money
● Decided to introduce new production method based on idea he saw few years before in a
meat-packing factory in Chicago - the assembly line
● Ford’s assembly line used an electric conveyor belt that carried partly assembled car past
workers who stood in same place and responsible for one or two small jobs eg. fitting doors
● For many years, Ford made only Model T that was mass produced - costs kept low since
there was one engine size, one colour (black) and no side windows
● As production got quicker, price of car fell - $800 in 1911, $295 in 1928
● 15 million people bought Model Ts 1911-1929
Impact of the motor industry
● Henry Ford was a brilliant businessman and a mechanical genius
● Model T changed motor industry forever - despite being slow, ugly and hard to drive, it was
sturdy, reliable and built with easy-to-change parts while getting cheaper to buy
● Right product at right time, catching public imagination when wanting new gadgets and a
chance to go beyond their own backyards
Changing nation
● Impact of carmaking and car buying was huge
● Jobs created not only in factories making cars (500k+ people by 1925) but also in industries
supplying materials
● Also jobs building roads, highways and oil refineries to supply fuel
● American society began to change as more people bought cars
● Some changes were negative eg. traffic jams, accidents and pollution
● Other changes were for better - car owners felt a new sense of freedom because they could
go wherever they wanted whenever they want and people no longer had to live near offices
and factories in town and city centres (could by a house out of town and drive to work)
People who didn’t benefit from the Boom
Farmers
● American farmers had done well during WW1 - sold crops and animals to countries at war
● When war ended, Europe’s farms began to recover and less demand for American imports
● Some foreign nations added taxes onto American crops, making it impossible to sell overseas
● New high-tech machinery eg. combine harvesters meant American farmers were producing
more food than demand
● Farmers who couldn’t sell food made little money - some had borrowed money to buy latest
machinery but now couldn't pay it back
● Many farmers forced to sell their farms or were evicted
Problems in traditional industries
● Cotton and wool factory workers suffered - less demand for products by popularity of
man-made fibres eg. rayon and fashion of shorter dresses (required less material)
, ● Price of cotton and woollen cloth fell and workers’ wages dropped too - some cotton and wool
factories shut down
● Coal miners suffered as coal mines began to close - other forms of fuel eg. oil, gas and
electricity increasingly used as alternatives to heat homes and cook food
African-American workers
● Majority of African-Americans lived in Southern states eg. Mississippi
● Many worked on farms as labourers or rented small areas of land from a landowner
(sharecroppers - had to give share of their crop to landlord as part of their rent agreement)
● Generally, living conditions were appalling and millions lived in poverty
● As farming industry suffered, African-American farmworkers and sharecroppers hit particularly
hard - already extremely poor
● Many made their way to cities but could only find low-paid jobs and some factories had
white-only policy
Indigenous Americans
● Much of their land had been seized by mining companies and their traditional way of life had
been taken away when they were forced to move to reservations
● Soil in reservations was often so poor it was impossible to grow crops properly
● A report in late 1920s found most indigenous Americans lived in extreme poverty, poorly
educated and had lower life expectancy than other ethnic groups in American society
Inequalities of wealth
● Richest 5% earned 33% of all money
● Tax records from US government show there were 21 people with annual income of $1m+ in
1921, 75 in 1924, 207 in 1926 - estimated 15k US millionaires in 1927
● 6 million families (42% of total) earned less than $1k a year
● Large industrial firms were able to keep their profits high by paying low wages to their
unskilled workers - couldn’t buy products of consumer Boom or even basic necessities of life
The stock market
Stock market boom
● During 1920s, playing the stock market became a national craze
● Several million people (including ordinary Americans) bought and sold shares to make money
● In 1920s, many bought shares with money borrowed from banks or with small deposit of 10%
● Would then pay remaining amount with profits made when shared were sold
● Method of purchasing was called “buying on the margin” and it worked as long as prices
continued to rise
How the stock market works
● To set up a company you need money for wages, equipment, land etc
● Most companies get money from investors - in return, investors own a share of the company
(shareholder)
● Shareholder makes money by:
○ Receiving a share of the company profits (dividend) each year
○ Selling share for higher price than paid - possible when company does well and
makes profits but might not be able to sell share if company does badly
● Shares bought and sold on stock market - America’s is in New York, on Wall Street
Popularity
● In 1920, only 4 million people who owned shares - by 1929, 5x
● For a while it seemed every investor won when playing the stock market
● Herbet Hoover (America’s president) believed stock market as way to end poverty in USA
The roaring twenties
“Wonderful nonsense”
● Roaring twenties was a time of crazies
, ● Millions were hooked on chinese board game mahjong before crosswords
● When crosswords died out, marathon dancing and pole sitting became popular
● People would see how long they could dance without stopping or how long they could sit on a
high place without falling off - Alvin “Shipwreck” Kelly set record of 49 days on a flagpole
Sport
● Golden age for American sport - for first time, sportspeople achieved celebrity status
● Babe Ruth (baseball player for New York Yankees) became national hero after setting home
run record that lasted until 1961
● By 1930, earning $80k a year (£7m a year today)
● Bobby Jones took golfing world by storm - won British Open in 1926, 1927, 1930 and US
Open in 1923, 1926, 1929, 1930
● Radio broadcasts, newspapers and magazines helped bring major sporting events to mass
audience
● Around 60m radio listeners heard coverage of 1927 World Heavyweight Boxing title fight
between Jack Dempsey and Gene Tunney
Jazz Age
● 1920s often called “Jazz Age” - new form of music (Jazz) became popular at time
● Originated in Southern states among African-Americans
● Many styles of jazz but mainly known for improvisation, fast tempo and lively rhythms
● By 1920s, jazz music spread from South as African-Americans moved north in search of work
● Loud, lively music appealed to young and soon became most popular music style in dance
halls, bars and nightclubs in some big Northern cities eg. Chicago and New York
● New dances came to go with this popular new style of music
● Charleston (first performed around 1903 in a Harlem (New York) stage show) was best-known
dance but One Step, Tango and Black Bottom were also popular
● Before long, formal dances eg. Victorian Waltz were a distant memory
● Jazz provided great opportunities for black musicians too eg. Louis Armstrong, Fats Waller,
Bressie Smith - made big money from nightclub & radio performances and record sales
Cinema
● One of biggest success stories of 1920s
● Hollywood (area just outside Los Angeles) had all year round sunshine and many major
movie companies’ studios eg. MGM, Warner Brothers, Paramount
● Movies were already big business before 1920s (35m weekly audiences in 1919) but during
next decade, audience nearly trebled to up to 100m a week
● Part of success of movie industry was due to “star system” - term used to describe way movie
studios promoted their starring actors, not just the films they were in
● Made sure media had full access to star eg. public appearances, interviews, photo shoots
● Moviemakers realised star of movie was more important than plot - people would pay to see
favourite actors even if movie was terrible
● As a result of star system, performers like Charlie Chaplin, Rudolf Valentino and Clara Bow
became popular
● By 1929, hollywood film studios were making 500m+ films a year
● By 1930s, hollywood stars even had to compete with cartoon characters
“Talkies”
● Until 1927, all movies were silent - words appeared on screen at regular intervals and a piano
player provided live background music
● Then “The Jazz Singer” was released - first of the “talkies” (talking films)
● Boosted cinema audience figures to all-time high - moviegoers desperate to hear stars’ voices
● Ruined careers of actors and actresses who looked great but had unusual voices or accents
The Hays Code
● Movies horrified many older Americans - worried about sexual content of some films and the
impact on the morals of the young
Why there was an economic boom in 1920s
WW1
● When WW1 broke out in Europe, USA stayed out of it as part of policy known as isolationism
● Most politicians wanted to avoid involvement in European quarrels in case America got
dragged in an expensive foreign war that would cost American soldiers’ lives
● Staying out of first 3 years allowed USA to prosper financially - American banks loaned
money to Britain and its allies used to buy food weapons and equipment mainly from USA
● Created many jobs in America and made lots of business people very rich
● Before war, Germany had been world’s leading manufacturer of chemicals, dyes and
medicines - war disrupted this
● Soon, American chemical industry was outproducing Germany’s and by end of war USA led
world in production of medicines, dyes and other materials eg. bakelite, cellophane
Aftermath
● USA eventually joined war on Britain’s side in 1917 and although 100k+ American soldiers
died fighting, America faced much smaller impact than on Europe
● Europe had been exhausted by war while USA was untouched by fighting - produced high
percentage of world’s basic goods
● Skilled inventors and business people now able to exploit these resources and make fortunes
● America also was only major nation not faced by huge wartime debts - other countries owed
them money eg. Britain, Germany
Consumer society
● In 1916, only 15% of American homes had electricity - nearly 70% of homes by 1927
● Meant workers could spend their money on ultra-modern electric-powered “gadgets'' recently
invented eg. vacuum cleaners, refrigerators etc
● Huge demand for these goods created jobs in manufacturing factories
Help from Republican government
● To help American businesses, Republican government introduced several new policies
● Eg. Fordney-McCumber Tariff Act - put high import duties, making foreign-produced goods
more expensive so customers choose American-made products by price
● Government also cut taxes on rich people and companies - could start more companies and
create more jobs
● Low taxes also meant people had more money to spend on range of new products available
● Republicans believed in policy of “laissez-faire” - businesses should be left alone to get on
with process of creating wealth
Growing industries and mass production
● Growth of motor industry was massive boost to US economy
● Carmaking used 20% of America’s steel, 65% of its leather and 75%+ of its rubber and glass
● More jobs created in these industries as more cars were made
● American business people were quick to see advantages of using latest technology to
produce goods - before long, many other industries were using assembly lines
● Assembly lines: products are built bit by bit by different people (leads to mass production)
● As companies got better and quicker at making goods, they got cheaper
New ways to buy and sell
● Desire to own new consumer goods increased by advertising campaigns
● Colourful billboards, newspapers and magazines urged people to buy the latest gadgets
● For those who didn’t live near large shopping town, catalogue could be delivered to door - can
buy almost anything
● Cinemas and radios broadcast advertisements, encouraging people to use “buy now, pay
later” schemes (hire purchase plan)
,Cycle of prosperity
Importance of Henry Ford
Henry Ford
● By 1911, realised needed to produce cars more cheaply and efficiently to make more money
● Decided to introduce new production method based on idea he saw few years before in a
meat-packing factory in Chicago - the assembly line
● Ford’s assembly line used an electric conveyor belt that carried partly assembled car past
workers who stood in same place and responsible for one or two small jobs eg. fitting doors
● For many years, Ford made only Model T that was mass produced - costs kept low since
there was one engine size, one colour (black) and no side windows
● As production got quicker, price of car fell - $800 in 1911, $295 in 1928
● 15 million people bought Model Ts 1911-1929
Impact of the motor industry
● Henry Ford was a brilliant businessman and a mechanical genius
● Model T changed motor industry forever - despite being slow, ugly and hard to drive, it was
sturdy, reliable and built with easy-to-change parts while getting cheaper to buy
● Right product at right time, catching public imagination when wanting new gadgets and a
chance to go beyond their own backyards
Changing nation
● Impact of carmaking and car buying was huge
● Jobs created not only in factories making cars (500k+ people by 1925) but also in industries
supplying materials
● Also jobs building roads, highways and oil refineries to supply fuel
● American society began to change as more people bought cars
● Some changes were negative eg. traffic jams, accidents and pollution
● Other changes were for better - car owners felt a new sense of freedom because they could
go wherever they wanted whenever they want and people no longer had to live near offices
and factories in town and city centres (could by a house out of town and drive to work)
People who didn’t benefit from the Boom
Farmers
● American farmers had done well during WW1 - sold crops and animals to countries at war
● When war ended, Europe’s farms began to recover and less demand for American imports
● Some foreign nations added taxes onto American crops, making it impossible to sell overseas
● New high-tech machinery eg. combine harvesters meant American farmers were producing
more food than demand
● Farmers who couldn’t sell food made little money - some had borrowed money to buy latest
machinery but now couldn't pay it back
● Many farmers forced to sell their farms or were evicted
Problems in traditional industries
● Cotton and wool factory workers suffered - less demand for products by popularity of
man-made fibres eg. rayon and fashion of shorter dresses (required less material)
, ● Price of cotton and woollen cloth fell and workers’ wages dropped too - some cotton and wool
factories shut down
● Coal miners suffered as coal mines began to close - other forms of fuel eg. oil, gas and
electricity increasingly used as alternatives to heat homes and cook food
African-American workers
● Majority of African-Americans lived in Southern states eg. Mississippi
● Many worked on farms as labourers or rented small areas of land from a landowner
(sharecroppers - had to give share of their crop to landlord as part of their rent agreement)
● Generally, living conditions were appalling and millions lived in poverty
● As farming industry suffered, African-American farmworkers and sharecroppers hit particularly
hard - already extremely poor
● Many made their way to cities but could only find low-paid jobs and some factories had
white-only policy
Indigenous Americans
● Much of their land had been seized by mining companies and their traditional way of life had
been taken away when they were forced to move to reservations
● Soil in reservations was often so poor it was impossible to grow crops properly
● A report in late 1920s found most indigenous Americans lived in extreme poverty, poorly
educated and had lower life expectancy than other ethnic groups in American society
Inequalities of wealth
● Richest 5% earned 33% of all money
● Tax records from US government show there were 21 people with annual income of $1m+ in
1921, 75 in 1924, 207 in 1926 - estimated 15k US millionaires in 1927
● 6 million families (42% of total) earned less than $1k a year
● Large industrial firms were able to keep their profits high by paying low wages to their
unskilled workers - couldn’t buy products of consumer Boom or even basic necessities of life
The stock market
Stock market boom
● During 1920s, playing the stock market became a national craze
● Several million people (including ordinary Americans) bought and sold shares to make money
● In 1920s, many bought shares with money borrowed from banks or with small deposit of 10%
● Would then pay remaining amount with profits made when shared were sold
● Method of purchasing was called “buying on the margin” and it worked as long as prices
continued to rise
How the stock market works
● To set up a company you need money for wages, equipment, land etc
● Most companies get money from investors - in return, investors own a share of the company
(shareholder)
● Shareholder makes money by:
○ Receiving a share of the company profits (dividend) each year
○ Selling share for higher price than paid - possible when company does well and
makes profits but might not be able to sell share if company does badly
● Shares bought and sold on stock market - America’s is in New York, on Wall Street
Popularity
● In 1920, only 4 million people who owned shares - by 1929, 5x
● For a while it seemed every investor won when playing the stock market
● Herbet Hoover (America’s president) believed stock market as way to end poverty in USA
The roaring twenties
“Wonderful nonsense”
● Roaring twenties was a time of crazies
, ● Millions were hooked on chinese board game mahjong before crosswords
● When crosswords died out, marathon dancing and pole sitting became popular
● People would see how long they could dance without stopping or how long they could sit on a
high place without falling off - Alvin “Shipwreck” Kelly set record of 49 days on a flagpole
Sport
● Golden age for American sport - for first time, sportspeople achieved celebrity status
● Babe Ruth (baseball player for New York Yankees) became national hero after setting home
run record that lasted until 1961
● By 1930, earning $80k a year (£7m a year today)
● Bobby Jones took golfing world by storm - won British Open in 1926, 1927, 1930 and US
Open in 1923, 1926, 1929, 1930
● Radio broadcasts, newspapers and magazines helped bring major sporting events to mass
audience
● Around 60m radio listeners heard coverage of 1927 World Heavyweight Boxing title fight
between Jack Dempsey and Gene Tunney
Jazz Age
● 1920s often called “Jazz Age” - new form of music (Jazz) became popular at time
● Originated in Southern states among African-Americans
● Many styles of jazz but mainly known for improvisation, fast tempo and lively rhythms
● By 1920s, jazz music spread from South as African-Americans moved north in search of work
● Loud, lively music appealed to young and soon became most popular music style in dance
halls, bars and nightclubs in some big Northern cities eg. Chicago and New York
● New dances came to go with this popular new style of music
● Charleston (first performed around 1903 in a Harlem (New York) stage show) was best-known
dance but One Step, Tango and Black Bottom were also popular
● Before long, formal dances eg. Victorian Waltz were a distant memory
● Jazz provided great opportunities for black musicians too eg. Louis Armstrong, Fats Waller,
Bressie Smith - made big money from nightclub & radio performances and record sales
Cinema
● One of biggest success stories of 1920s
● Hollywood (area just outside Los Angeles) had all year round sunshine and many major
movie companies’ studios eg. MGM, Warner Brothers, Paramount
● Movies were already big business before 1920s (35m weekly audiences in 1919) but during
next decade, audience nearly trebled to up to 100m a week
● Part of success of movie industry was due to “star system” - term used to describe way movie
studios promoted their starring actors, not just the films they were in
● Made sure media had full access to star eg. public appearances, interviews, photo shoots
● Moviemakers realised star of movie was more important than plot - people would pay to see
favourite actors even if movie was terrible
● As a result of star system, performers like Charlie Chaplin, Rudolf Valentino and Clara Bow
became popular
● By 1929, hollywood film studios were making 500m+ films a year
● By 1930s, hollywood stars even had to compete with cartoon characters
“Talkies”
● Until 1927, all movies were silent - words appeared on screen at regular intervals and a piano
player provided live background music
● Then “The Jazz Singer” was released - first of the “talkies” (talking films)
● Boosted cinema audience figures to all-time high - moviegoers desperate to hear stars’ voices
● Ruined careers of actors and actresses who looked great but had unusual voices or accents
The Hays Code
● Movies horrified many older Americans - worried about sexual content of some films and the
impact on the morals of the young
