Economic boom

• Americas economic position in 1910

  • USA had vast supplies of important natural resources.
  • Including coal, oil and gas.
  • Large population to provide workers and consumers.
  • Huge farming areas in the mid-west and south that produced a lot of food.
  • Production was ahead of the rest of the world.
• Outbreak of the first world war impact

  • Resulted in an economic boom for USA
  • US banks lent money to Britain, France and Russia to fight for war which would then be paid back with interest.
  • Money borrowed was then spent on American supplies.
  • Food shortages across Europe meant that farmers could sell their surplus crops for higher prices.
• Hire Purchase

  • Paying a small deposit and the rest in installments.
  • 6/10 cars were bought this way.
• Electrification

  • New technology played an important role in the economic boom.
  • Producing goods such as radios and washing machines.
  • By 1929, 70% of Americans had electricity.
  • New materials for the chemical industry such as rayon and bakelite which made products cheaper.
  • Lower prices - Increases sales
• Laissez Faire

  • When the government does not regulate a business.
  • Would not force employers to set minimum wages or improve working conditions.
  • Republican presidents 1920's - Cut taxes so that businesses could invest more money on improving their business.
• Speculating

  • People bought shares in industries in hope they can make profit.
  • 'Buying on the margin' - Borrowing money to buy shares so that when they rose in price, they could sell the shares and make profit and pay back the loan while maintaining profit.
• Henry Ford

  • Set out to build a car anyone could afford.
  • Given the nickname 'Tin Lizzie'
  • By 1929, Ford was producing a car per minute.
• Assembly line

  • Each worker would perform their operation on the car and then it would move onto the next station until completed.
  • This only needed fewer skilled workers which helped cut wages and keep the price of the car low.
• Result of Ford

  • Car production boosted employment in other industries.
  • Used up 20% of americas steel, 80% of rubber, 75% of plate glass and 65% leather.
  • By the end of 1920's, Americas cars used 7 gallons of petrol which helped create jobs in the oil industry.
  • More jobs available - More people available to afford a car.
• Economic position statistics

  • Produced 638 million bushels of wheat in comparison to their competition with 552 million bushels.
  • Exports of iron increased from 251.5m in 1914 to 1133.7m in 1917.