Why did the USA experience an economic boom in the 1920s?

Mass Production
1. Henry Ford introduced the production line, which revolutionised car manufacture. Assembly line moved at steady pace, setting rate of production. Meant low skilled and semi skilled workers could be employed.
2. By 1913, time taken to make a car had significantly decreased. By 1929, there were 26 million cars in the USA. Mass production led to higher output and lower prices. By 1925, Ford Model 2 cost $290, affordable for the ordinary American.
3. Creation of large industrial corporation allowed companies to benefit from economies of scale. Corporations bought up natural resources, and controlled the whole manufacturing process and sales of products. They could benefit from lower raw material costs and pass on lower costs to their consumers.
4. Electrification stimulated the development of other advances such as radios, vacuum cleaners and toasters. In 1912, there were 2.4 million electrical appliances in USA. By 19209, there were 160 million.
Technological advances and their impact on leisure
1. Important stimulant to consumer spending was development of advertising and marketing industries which were aided by technological advances of radio and cinema.
2. First major commercial radio station was KDKA in Pittsburgh, Pennsylvania. Began broadcasting in November 1920 + become model for radio stations across USA. Popular radio shows were sponsored by corporation advertising their goods.
3. By 1929, there were 619 commercial radio stations in the USA (providing a vast audience for advertisers.). By mid 1930s. 74% of all US households possessed a radio.
4. Cinema also provided another mass outlet for advertising. By 1929, every town in the USA possessed a picture theatre showing Hollywood films. New roads also provided new opportunities for advertising through billboards.
5. Growth in car ownership allowed workers to live further away from place of work, helping growth of suburbs around towns and cities + mobility allowed travel, tourism and leisure. Attendance to SeaSide Resorts such as Atlantic City and New Jersey grew rapidly.
The automobile
1. The motor car may have been the main driving force behind the economic boom of the 1920s.
2. Hundreds of thousands were involved in car manufacture., in companies such as Ford, General Motors and Chrysler. Detroit became the world's car manufacturing centre.
3. The car industry directly employed 375,000 workers. By 1929, the car industry employed 7% of the American manufacturing workforce.
4. Car manufacturing stimulated the growth of other industries such as steel, rubber and glass. As demand for cars increased, so did the demand for these essential materials. The huge increase in car ownership led to an equivalent rapid rise in demand for petrol --> stimulating oil industry and the emergence of petrol station, motels and garages to serve motorists.
Farmers, Black Americans and Limits to the Boom.
1. US agriculture had boomed during WW1 when Europe was devastated by armed conflict. US agricultural prices rose by 82% from 1913-1917. However, once war was over + European agriculture began to recover- demand for US food exports dropped + so did agricultural prices in USA.
2. Technological advances such as combine harvester affected agriculture. This machine greatly increased productivity in cereal production, but led to increase in employment in farm workers. By 1929, because of growth of towns and cities, more american lived in urban rather than rural areas for the first time.
3. in South eastern USA in 1920s, dominant crop- cotton was affected by appearance of nasty pest- boll weevil which caused serious damage to cotton plants.
4. Majority of Black Americans still lived in south eastern USA and suffered legal and social discrimination. Many were sharecroppers who were unable to escape poverty.
5. Outside the south-east Black Americans were given the most menial and low-paid jobs + lived in areas of poor quality housing. Even in northern states, Black Americans often ony had jobs such as labourers, railway clerks and domestic servants.
6. 1920s saw the biggest mass migration of Black Americans in history, Nearly a million left the poverty-stricken south east for jobs in prosperous northern industrial cities such as Detroit, New York and Chicago. By 1929, Black Americans were engaged in manufacturing employment in large numbers for the first time.
Hire Purchase
1. To encourage more consumer spending , firms in USA offered hire-purchase schemes
2. This allowed consumers to buy goods by initially paying a small portion of the price and paying off the rest of the price in monthly instalments.
3. In 1920, consumer borrowing was just over $2 billion, by 1929, it had risen to over $8 billion

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Why did the USA experience an economic boom in the 1920s?

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	Created by Kinza Hussain almost 8 years ago