Americans 1920s Economic and GDP Growth (The Boom and the Bust)…
Americans 1920s Economic and GDP Growth (The Boom and the Bust)
Rich in natural resources
Home market was large and was growing
By the time of the First World War, the USA led the world in most areas of industry
Had massive steel, coal and textile industries
Leading oil producer
Foremost in developing new technology
Newer industries such as chemicals were growing fast
New film industry already led the world
American agriculture had become the most efficient and productive in the world
Farmers had become so successful that they were producing more than they could sell, which was a very serious problem.
However, after 1920, the amount of people working in farms decreased drastically and the production of crops went down due to the new inventions.
The average net income (during 1929) per year was at $1,020 and decreased to $500 by 1921. However, it increased again to $690 in 1922.
In 1920, there were around 4 farm foreclosures per 1,000 farms. This number increased to 18 in 1927.
Ever since the 1860-70s, American industry grew vigorously
In 1919, the real GDP per Capita was $4,700, but then it increased and in 1929 the real GDP per Capita was roughly $5,700.
In 1920, the unemployment rate was at 5% per year. It then increased to 8.9% per year in 1921. Then it decreased again, however, by 1930 it increased to 9% per year.
American's attempted to avoid joining the war, however, they still lent money to the Allies
Sold arms and munitions as well as food stuffs
One-way trade gave the American industry a real boost
America was able to take over Europe's trade all over the word
Before the war, Germany had one of the most successful chemical industries (Stopped because of involvement in war)
By the end, USA had taken over Germany
Explosive manufacture during the war resulted in other products, such as plastics and other new materials
import "tariffs" made it expensive to import foreign goods
protected businesses against foreign competition
allowed American companies to grow even more rapidly
3 Low taxation
some benefits to ordinary (working) people, many to the very wealthy
idea was if "people kept their own money, they would spend it on American goods and wealthy people would reinvest into industries
government should interfere as little as possible in the everyday lives of the people.
the job of the President was to leave the businessman alone
where prosperity came from
huge super-corporations which dominated industry
Democrats fought against these monopolies (complete control of one sector of industry)
Republicans believed "captains of industry" knew what was best for USA
1920 to 1932 the US presidents were Republican, Republicans dominated Congress. Here are their beliefs
Electricity (more than 50% of the country had it, the rest wanted it)
Allowed American's to stop needing to buy an icebox every week to keep produce cold
in 1921, c. 5000 refrigerators were manufactures
Provided Americans with information regarding new products/trends. E.g. the fridge
Everyone in America wanted one (sold even in grocery stores). People found out about all of thee products via billboards (while driving,) and the radio
In 1922, roughly 0.1 million radio sets were produced and 1% of households had them. By 1929, roughly 4.5 million radio sets were produced and almost 40% of households had them.
It allowed American's to discuss new ideas/thoughts/news, fast and efficiently
Telephones (Already invented in 1876, but more produced.)
Telephone was already invented but the amount produced and sold increased drastically.
Around 13 million telephones were produced in 1920 and 19% of households had them. In 1929, roughly 20 million telephones were produced and 40% of households owned them while 15.5% of Americans owned one independently
Provided American's with travel opportunities, easy weekend trips, quality "family time," sporting events, beach holidays, shopping trips, etc...
New transport systems for products/goods
Helped cities to grow by opening up the suburbs
Car production rose from just under 2 million in 1920 to almost 4.5 million in 1929 (over 200% increase)
1 motor car per 4.5 Americans, by 1924, Henry Ford's "Model T" could be had for $290
an obsession among young people
Blues music was particularly popular among the black population
1920s : Jazz Age
They would visit at least once a week to enter a world of fantasy
The Golden Age of Hollywood, Taking and colored movies.
Baseball became a big money sport with legendary teams like the New York Yankees and the Boston Red Sox
Famous icons such as Al Capone were huge Baseball fans
Boxing was also very popular
Heavyweight champion Jack Dempsey was famous
-Used billboards to advertise the latest invention for households
-Used the radio to advertise
State of Mind
Use of credit
Everyone was buying popular products/new inventions on credit, once it was time to pay, they would play the stock market would boom, or sell something, and buy it back on credit. "buy now, pay later"
instead of having a credit card or bank account
"Buy now pay later" scheme
e.g. only paying for 10% of what was owed since they didn't have enough money
was a problem, since they kept on postponing paying the credit back, since they didn't have enough money and thought that they would have a job forever
The Stock Market
Millions of new investors, many bought stock on margin. In the years after the 1929 crash, the credit-based economy fell apart.
In October 1929, the Wall Street stick market crashed, the American economy crashed, and the USA entered a long depression that destroyed much of the prosperity of the 1920s
Huge issue, was doomed from the very beginning
President Harding himself has alcohol delivered to the White House
Illicit establishment that sold numerous alcohol beverages
Criminal gangs expanded to supply demand
Age of Al Capone
The overall crime rate went up in America when prohibition began
18th Amendment of the US Constitution declared that the manufacture, sale and consumption of "intoxicating liquor" was illegal
Passes when Wilson was president, however the Republicans faced the task of enforcing those policies throughout the 20s
Atmosphere of "lasses faire" was challenged by this key constitutional change
What did the government do?
the government restricted immigrations
different cultural and religious background
Many immigrants were very poor (lived in ghettos separated by religion/culturs/natonalities
lived in cramped positions (Tenements)
many were illiterate
Trauma and fear of Communism (Red Scare)
the system ensured that the largest proportion of immigrants was from north-west Europe and that limited immigration from southern and eastern Europe.
many nativists (not everyone encouraged immigration/like immigrants(
Immigrants had to pass through several writing and reading tests by 1917. (Literacy Test)
-Massive migration to urban areas.
-Skyscraper could have more jobs than people in rural area.
-Rural women were more conservative.
-Didn’t believe in the consumption of alcohol.
-Household ideals where women stay home to look after kids and cook and clean.
-Women in cities wore less conservative clothes also known as flappers.
-Went out to speakeasies and drank almost every night.
-Believed that women could be independent.
-Lack of jobs in rural area.
-Thought that fun was not wanted in rural american ‘conservative’.
-People were scared of the cities.
The number of income millionaires rose from 65 people in 1919 to 513 in 1929.
Labour workers were being paid only $18 for men and $9 for women for a 70-hour week.
The Ku Klux Klan was a white supremacy movement. it used violence to intimidate black Americans.
Its members waged an underground campaign of intimidation and violence directed at black people. .
They also burned crosses and staged rallies, parades and marches denouncing immigrants, Catholics, Jews, blacks and organized laborers