Depth Study -The United States, 1919 - 1941
1) How far did the US economy boom in the 1920s?
Factors causing the Boom:
Resources:
- The USA had a great store of natural resources, wood, iron coal, minerals, oil and land.
- These made the US a great industrial power at the beginning of the 20th century and
provided a good foundation for further expansion in the 1920s.
Impact of WW1:
- During WW1, the USA supplied Europe with many goods and had taken over the
majority of European overseas markets.
- This created a great opportunity for the US to trade with many overseas countries. This
gave them a high global position
- The war hastened technological change which the US industry seized on.
Technological change:
- This was a period of great innovation. The development of electricity provided a cheaper,
more efficient source of power for factories. It also led to the invention and production of
new consumer goods such as refrigerators, vacuum cleaners and radios.
- Also, conveyer belts and concrete mixers were developed which helped modernize
industries and develop new ones.
Policies of the Republican Presidents:
- Lowered taxes on income and company profits, giving the wealthy more money to invest
in US industries and buildings, and people more money to spend on US goods.
- They put Tariffs on imported goods. This made imports more expensive compared with
US-made goods and helped American producers
- They didn’t interfere in business or put any controls on financial institutions, encouraging
the growth of business and the Boom. This was called Laissez-Faire.
Confidence:
- Confidence amongst Americans was high.
- This meant the confidence to buy goods, invest in companies and try out different new
ideas.
- The increased production of consumer goods creates increased employment. More
production causes prices to drop, which meant people had more money to spend on
these goods. This in turn creates an increased demand for goods and encourages
further production. This is the Cycle of prosperity.
- Confidence is a vital ingredient in any economic boom
Credit and hire purchase:
- The growth of credit made it easier for people to buy goods even though they didn’t have
enough cash to pay for them on the spot.
- This meant people could buy products even if they did not have enough money. Created
more demand for products (as more was selling)
- The firm arranged for customers to pay in instalments or hire purchases.
Mass Production (Motor car industry):
, - Goods could be made quicker and cheaper. In factories, parts of a product were added
as it travelled along an assembly line. By the end of the line, the product was complete.
This made production rise rapidly.
- Henry Ford used this new technique in 1911 to build the first Model T. He made cars so
cheap that thousands of ordinary Americans could afford them.
- The expansion of the car industry also helped other industries to grow, such as steel,
glass and rubber.
- More cars led to the building of more roads, and service stations, and increased
consumption of petrol. It also helped the tourism industry as people had great freedom to
travel and more leisure time as they could travel/transport more easily and quickly, and
they could access everything simply
- In 1908, Model-T was introduced at around 1200 USD. By 1925, it was available for 295
USD.
- Mass production also allowed Ford to give all his employees a good wage/salary.
Mass-marketing (advertising industry):
- Mass-produced goods have to be sold to a mass market.
- Companies spent huge amounts of money on advertising. This new industry developed
sophisticated techniques to persuade people to buy their goods.
- Radios and cars were widely used in advertising, allowing consumers in the countryside
to access the wide range of goods on offer.
New Industries vs Old industries:
New industries:
- Vacuum cleaners
- Radios - impacted the commercial and entertainment industry. (radios on cars)
- Refrigerators
- Telephones
- Construction industry - new roads for more cars
- Advertisement - influenced people to buy more consumer goods.
- Cars - more leisure time, more time for entertainment.
- Shopping - clothes, new materials, styles. Clothing sales went up 427% in the 1920s.
- Entertainment - sports, newspapers and magazines. Babe Ruth - baseball.
Cinema - film industry:
- The talkies were movies with speaking in them.
- ‘The Flapper’ - released in 1920, no speaking, live orchestra/band would play
instrumental music in the background.
- The film ‘The Jazz Singer’ - released in December 1927 was the first time sound and
voice were shown in cinemas. Starred Al Jolson, a famous musician.
- ‘The Kid’ - released in 1921, a silent movie starring Charlie Chaplin.
- Chaplin was an English actor who became a leading star both before and after the
‘talkies’
- When he died in 1977, he was suspected to have earned the equivalent of 400 million
USD in his career.
- Impacted the advertisement, fashion, and snacks industry.
, - Actors would want to promote themselves, the society would want to follow the fashion
‘trends’ of those celebrities. Celebrity endorsement affects consumer buying behavior.
Old industries:
Cotton and wool industries:
- Faced a lot of competition with new artificial fibers such as rayon.
- Textile workers were song the lowest paid
Raw material industries (cotton, coal, tin, copper):
- Suffering from overproduction
- Prices dropped and wages fell
The decline in agriculture:
- After WW1 Britain, France and other European countries traded more with Canada since
it was British territory
- They no longer needed the extra help from the US
- People were inclined to move from rural countryside to urban cities.
- There was a lot of overproduction in agriculture industries, there was a lot of food but no
-one was buying it.
- Wages go up while prices down, and no profit, bankruptcy.
Not all benefited from the Boom:
Workers in old industries:
New immigrants:
- They took whatever they could get, partly because they were less educated than the
other workers
- A large number worked in construction, however, their wages were extremely low, and it
only rose by 4% throughout the 1920s
- They were a supply of cheap labour. But the unemployment rate amongst new
immigrants remained high throughout the decade
Blacks:
- Most black people were in the southern states (farming)
- ¾ of a million black farm workers lost their jobs in the 1920s
- Some moved north to find work in the cities.
- By the end of the decade, 25% of blacks were living in northern cities
- In the cities, they had more opportunities than in the south, but they still faced
discrimination
- 60% of black women in northern cities had low-paid jobs, and most worked as maids in
white-households
- Most factories hired only white people or only little black people
- Some were sharecroppers (sharecropping), and their land owners give them a part of
their land instead of paying them
- However, if they don’t grow enough they won’t make enough money.
Farmers:
1) How far did the US economy boom in the 1920s?
Factors causing the Boom:
Resources:
- The USA had a great store of natural resources, wood, iron coal, minerals, oil and land.
- These made the US a great industrial power at the beginning of the 20th century and
provided a good foundation for further expansion in the 1920s.
Impact of WW1:
- During WW1, the USA supplied Europe with many goods and had taken over the
majority of European overseas markets.
- This created a great opportunity for the US to trade with many overseas countries. This
gave them a high global position
- The war hastened technological change which the US industry seized on.
Technological change:
- This was a period of great innovation. The development of electricity provided a cheaper,
more efficient source of power for factories. It also led to the invention and production of
new consumer goods such as refrigerators, vacuum cleaners and radios.
- Also, conveyer belts and concrete mixers were developed which helped modernize
industries and develop new ones.
Policies of the Republican Presidents:
- Lowered taxes on income and company profits, giving the wealthy more money to invest
in US industries and buildings, and people more money to spend on US goods.
- They put Tariffs on imported goods. This made imports more expensive compared with
US-made goods and helped American producers
- They didn’t interfere in business or put any controls on financial institutions, encouraging
the growth of business and the Boom. This was called Laissez-Faire.
Confidence:
- Confidence amongst Americans was high.
- This meant the confidence to buy goods, invest in companies and try out different new
ideas.
- The increased production of consumer goods creates increased employment. More
production causes prices to drop, which meant people had more money to spend on
these goods. This in turn creates an increased demand for goods and encourages
further production. This is the Cycle of prosperity.
- Confidence is a vital ingredient in any economic boom
Credit and hire purchase:
- The growth of credit made it easier for people to buy goods even though they didn’t have
enough cash to pay for them on the spot.
- This meant people could buy products even if they did not have enough money. Created
more demand for products (as more was selling)
- The firm arranged for customers to pay in instalments or hire purchases.
Mass Production (Motor car industry):
, - Goods could be made quicker and cheaper. In factories, parts of a product were added
as it travelled along an assembly line. By the end of the line, the product was complete.
This made production rise rapidly.
- Henry Ford used this new technique in 1911 to build the first Model T. He made cars so
cheap that thousands of ordinary Americans could afford them.
- The expansion of the car industry also helped other industries to grow, such as steel,
glass and rubber.
- More cars led to the building of more roads, and service stations, and increased
consumption of petrol. It also helped the tourism industry as people had great freedom to
travel and more leisure time as they could travel/transport more easily and quickly, and
they could access everything simply
- In 1908, Model-T was introduced at around 1200 USD. By 1925, it was available for 295
USD.
- Mass production also allowed Ford to give all his employees a good wage/salary.
Mass-marketing (advertising industry):
- Mass-produced goods have to be sold to a mass market.
- Companies spent huge amounts of money on advertising. This new industry developed
sophisticated techniques to persuade people to buy their goods.
- Radios and cars were widely used in advertising, allowing consumers in the countryside
to access the wide range of goods on offer.
New Industries vs Old industries:
New industries:
- Vacuum cleaners
- Radios - impacted the commercial and entertainment industry. (radios on cars)
- Refrigerators
- Telephones
- Construction industry - new roads for more cars
- Advertisement - influenced people to buy more consumer goods.
- Cars - more leisure time, more time for entertainment.
- Shopping - clothes, new materials, styles. Clothing sales went up 427% in the 1920s.
- Entertainment - sports, newspapers and magazines. Babe Ruth - baseball.
Cinema - film industry:
- The talkies were movies with speaking in them.
- ‘The Flapper’ - released in 1920, no speaking, live orchestra/band would play
instrumental music in the background.
- The film ‘The Jazz Singer’ - released in December 1927 was the first time sound and
voice were shown in cinemas. Starred Al Jolson, a famous musician.
- ‘The Kid’ - released in 1921, a silent movie starring Charlie Chaplin.
- Chaplin was an English actor who became a leading star both before and after the
‘talkies’
- When he died in 1977, he was suspected to have earned the equivalent of 400 million
USD in his career.
- Impacted the advertisement, fashion, and snacks industry.
, - Actors would want to promote themselves, the society would want to follow the fashion
‘trends’ of those celebrities. Celebrity endorsement affects consumer buying behavior.
Old industries:
Cotton and wool industries:
- Faced a lot of competition with new artificial fibers such as rayon.
- Textile workers were song the lowest paid
Raw material industries (cotton, coal, tin, copper):
- Suffering from overproduction
- Prices dropped and wages fell
The decline in agriculture:
- After WW1 Britain, France and other European countries traded more with Canada since
it was British territory
- They no longer needed the extra help from the US
- People were inclined to move from rural countryside to urban cities.
- There was a lot of overproduction in agriculture industries, there was a lot of food but no
-one was buying it.
- Wages go up while prices down, and no profit, bankruptcy.
Not all benefited from the Boom:
Workers in old industries:
New immigrants:
- They took whatever they could get, partly because they were less educated than the
other workers
- A large number worked in construction, however, their wages were extremely low, and it
only rose by 4% throughout the 1920s
- They were a supply of cheap labour. But the unemployment rate amongst new
immigrants remained high throughout the decade
Blacks:
- Most black people were in the southern states (farming)
- ¾ of a million black farm workers lost their jobs in the 1920s
- Some moved north to find work in the cities.
- By the end of the decade, 25% of blacks were living in northern cities
- In the cities, they had more opportunities than in the south, but they still faced
discrimination
- 60% of black women in northern cities had low-paid jobs, and most worked as maids in
white-households
- Most factories hired only white people or only little black people
- Some were sharecroppers (sharecropping), and their land owners give them a part of
their land instead of paying them
- However, if they don’t grow enough they won’t make enough money.
Farmers:
