Reasons for the Boom

• New technologies


  New tech meant that new products could be developed, particularly ones that used new plastics.

  Improvements in making and transporting electricity to people's homes meant they could use new electrical goods.

  This made new industries and products possible, such as vacuum cleaners.
• Credit

  Credit meant that it was much easier for Americans to buy goods.

  Businesses arranged for customers to pay by instalments or hire-purchase.

  This meant these people could buy goods even if they didn't have enough money at that particular time.
• A confident state of mind


  The American public and America business thought economy would always grow.

  As a result Americans were more willing to buy goods, invest in new companies, and try out new ideas.
• Motor Cars


  Motor cars had an enormous effect on the US economy.

  Thousands of people were employed in making cars and supplying the manufacturers.

  Thousands of ordinary Americans had cars while they remained a rich privilege in Europe.

  This stimulated growth in other industries (metal, rubber, glass, etc.) and in road building and construction. It created jobs for people who would spend their wages on goods and products.
• The policies of republican residents.

  The policies helped businesses.

  Taxes were kept low so people had more money to spend or invest.

  Regulations were removed to give businesses freedom.

  Imported goods (made in other countries) were taxed heavily, making them expensive - these were called tariffs.

  This gave businesses a chance to grow without government restrictions and helped progress of American-made goods.
• Advertising


  Companies discovered new ways to persuade people to buy products.

  Mail-order companies gave those in the countryside a chance to purchase goods too without going into shops.

  This encouraged people to keep buying goods and products which helped keep the economic boom going.
• The First World War (1914-1918)


  American industries had grown rapidly while Europe was busy fighting, when the war ended, there was an enormous demand for US goods.

  This gave American industry a flying start at the beginning of the 1920s as they moved into overseas markets, overtaking European competitors.
• Mass Production

  Techniques such as automated assembly lines meant that goods could be produced quickly and in huge quantities.

  Henry Ford pioneered mass production in the motor car industry by introducing the assembly line. This was soon copied in other industries.

  This made cars and other products more affordable as they were easier to produce.
• Natural Resources


  The USA had a great store of natural resources such as iron, coal, minerals, wood, land, etc.

  This provided the necessary materials to power factories and manufacture goods.