Please enable JavaScript.
Coggle requires JavaScript to display documents.
Causes of the Boom 1920s - Coggle Diagram
Causes of the Boom 1920s
Mass Production
- Highway fund legislation in 1916 and Federal Highway Act in 1921 led to a massive era of road-building
- Model T Ford most popular car, by 1929 there were 26 million in the US ($290 – very affordable)
- Car industry employed 375 000 (7% of manufacturing workforce) Ford’s workers were paid $5 a day - which stimulated the US economy
- Mass production meant items could be made cheaply – also lots of jobs for unskilled workers
- 75% of Americans had electricity by 1929 BUT rural areas were still without
The Automobile
- Car registration increased from 8 million in 1920 to 28 million in 1929
- In 1920 Ford alone produced 1.25 million cars, one every 60 seconds
- By 1929, the car industry employed 7% of the American manufacturing workforce, paying 9% of all manufacturing wages
Technological Advances
-
By 1929, there were 619 radio stations – advertising
-
In 1912 there were 2.4 million electrical appliances, by 1929 there were 160 million
Hire Purchasing
- In the 1920s average income per head rose by 27%, this, together with the decrease in prices of goods (due to mass production) meant consumers were willing to spend more money
- 75% of cars and 90% of washing machines were bought through instalments
- Consumer borrowing rose from $2bn to $8bn by 1929
Laissez Faire
-
- Tax reductions – the gov. gave out tax reductions to large-scale industrialists from 50% to 20%.
- Andrew Mellon, secretary to the Treasury handed out $3.5 billion worth of tax reductions from 1921-1932
-
Advantageous foreign markets – Government encouraged investment abroad, e.g. oil concessions in many countries
“The Business of America is Business” Calvin Coolidge– Limited trade unions - Restricted powers under various acts between 1921 and 1925 – union membership fell from 4 million after WWI to under 3 million by 1929