American Economy 1910 - 1929
LO: Revise the American Economy
What were the key features of the Boom? - FEMCATS Films Electricity Magazines Construction Advertising Transport Shopping
FILMS • Hollywood film-making capital of the world • 1929 – 30 million cinema tickets sold each week • Films were ‘mass-produced’ • First ‘talkie’ 1929 – The Jazz Singer • Movie stars became celebrities – appeared in all magazines.
ELECTRICITY Vacuum cleaners
radio
fridges
Can you name any new electrical items of the 1920s?
Washing machines
MAGAZINES •Meant people could read about their favourite films etc •Advertisements in them •Made actors into STARS
CONSTRUCTION •Huge buildings e.g. Empire State Building, Yankee Stadium •More roads
ADVERTISING In Magazines and on Radio
Meant more people could get to know about events
Mail order companies could advertise to people who couldn’t get to their shops
TRANSPORT •More cars and trucks
•More buses
•Passenger air flights started up
SHOPPING •Chain stores sold mass-produced clothes •Could buy on credit. •Delivery easier through mail-order
Reasons for the Boom There’s many reasons for the Boom seen in the USA One is new technology, just like we have today. WWI got America off to a flying start and natural resources set the USA apart. Then there’s mass-production, started up by Henry Ford. Mass-marketing meant more adverts and confidence just soared! The Republicans in charge just left businesses alone. People could buy on credit with just a little loan.
Republican Presidents • 1920s – all Presidents Republican • Believed in laissez-faire and ‘rugged individualism’ • Fordney-McCumber Tariffs made it more expensive to buy foreign goods…so people would buy American goods!
Leave big businesses alone and they will benefit the country.
• Putting taxes on foreign goods is called protectionism
Many big companies didn’t have to pay taxes If you work hard, you will succeed on your own
Who was Calvin Coolidge? • President 1923 – 1929 • Republican • Firmly believed in laissez-faire
What 4 key words would you use when describing policies of Republican Presidents?
• • • •
Laissez-Faire Rugged Individualism Protectionism Fordney-McCumber Tariffs
Why was Henry Ford important? • Invented “Model-T” • Started massproduction (assembly line) • People copied his business ideas (he paid workers higher wages to keep them happy) • Increase in car meant increase in glass, petrol, rubber industries
•Car gave people freedom and independence, especially farmers. •Some people thought they encouraged crime! (get-away cars)
Mass-Production • First used by Henry Ford • Used an assembly-line • Cars were standardised (all the same) • Quicker and cheaper. • Didn’t have to train the whole work-force 1913 – 1 car every 3 minutes 1929- I car every 10 seconds
Give 5 key words associated with the car industry • • • • •
Henry Ford Model-T mass production assembly-line standardisation
Who didn’t benefit from the Boom? Farmers People in old Industries (coal, cotton) Blacks New Immigrants
Farmers: Mechanisation (using machinery) led to over-production.
Some big farms did well but many farmers found themselves evicted from their farms.
People in Old Industries: Mechanisation led to over-production. Prices dropped and wages fell.
Blacks: Man in south worked on farms so lost jobs. In north, faced discrimination. Many car-factories had an all-white policy
New Immigrants: Faced discrimination, high unemployment.
What was the Wall Street Crash? Autumn 1929, people began to worry that economy was slowing down. Some large investors sold lots of their shares caused people to panic and everyone started selling! Value of shares plunged rapidly.24th October 1929 = Black Thursday. 12.8 million shares traded. Group of bankers tried to stop this by investing $30 million into stock market but this failed. 29th October 1929 = Wall Street Crash. The stock market crashed and many businesses went bankrupt
THE GREAT DEPRESSION
Reasons for the Wall Street Crash Long-term reasons Falling demand – Many people could not afford to buy consumer goods; others had bought on credit and were in debt; those who already had cars, radios etc did not need to buy any others Overproduction –more consumer goods being made than could be sold; manufacturers did not cut back on production; farmers were producing more than they could sell (Europeans had recovered from war which meant US farmers were exporting less) Tariffs – on foreign goods meant other countries did the same so USA could not sell surplus good abroad.
Short-term reasons Speculation – Millions of people played the stock market. Bought shares ‘on the margin’ (borrowed money to buy them). This meant that if the value of shares fell – they would lose their money! Panic Selling – Autumn 1929, people began to worry that economy was slowing down. Some large investors sold lots of their shares Caused people to panic and everyone started selling. Value of shares plummeted – caused stock market to crash. Possibly biggest problem!