KQ4

• America's economy


  • Boomed in the early 20th century
• Republican presidents adopted a laissez-faire policy but not everyone benefited from the prosperity
• Laissez-faire policy


  Government leaves the economy alone, allowing big businesses to expand without being held back
• Causes of the economic boom in the 1920s


  • America's assets and development
  • Europe's economies suffered during WWI while USA experienced growth
  • Electricity industry boom
  • Mass production in car industry
• Natural resources


  Timber, iron, coal, minerals, oil, land
• Immigrants


  Provided a plentiful and cheap work force
• While European economies suffered during WWI

  The USA experienced significant growth
• USA loaned money to Europe and sold needed goods


  This provided a stimulus for inventions in production, materials and advertising
• Electricity industry boom


  Majority of houses had electricity by 1929, 70% used for lighting, demand for electricity doubled
• Mass production in car industry

  Henry Ford's affordable cars, price reduced from $850 to $290 by 1925
• More cars produced


  More jobs created, roads/petrol stations/hotels/restaurants built, economy boosted
• Hire-purchase and credit


  Allowed Americans to afford expensive goods
• Chain stores


  • J P Penney
• Catalogue shopping


  • Convenient way of buying goods
• Laissez-faire policy


  Big businesses free to expand without government interference
• Warren Harding


  • Reduced taxes, introduced Fordney-McCumber Tariff Act to protect domestic goods
• Calvin Coolidge


  • Stuck to laissez-faire policy, gave businessmen freedom to profit
• Herbert Hoover


  • Believed in laissez-faire and rugged individualism, lost 1932 election due to this viewpoint
• Industrial growth doubled in the 1920s, biggest increase in new industries like chemicals, electrical goods and cars
• Radio sales increased from 60,000 in 1919 to 10 million in 1929, telephone equipment from 10 million in 1915 to 20 million in 1930
• Building industry boomed, demand for new factories, offices, skyscrapers
• Ford's assembly line


  Allowed building a car in 1.5 hours instead of 13.5 hours, 7,500 cars produced daily
• Car industry growth


  Led to construction of new roads and suburbs, changed people's way of life, sparked growth in other industries
• Groups that did not share in the 1920s boom

  • Farmers
  • Black people
  • Immigrants
  • Old traditional industries (coal, shipbuilding, cotton)
• Farmers


  Overproduced crops, prices fell, many went into debt and lost their farms
• Black people


  Suffered economically, especially in the South, many migrated to northern cities
• Immigrants


  High unemployment rate, endured prejudice
• Old traditional industries


  Failed to respond to new mass production methods, workers not able to claim better wages and conditions
• Not everyone was rich in America during the 1920s, some benefitted from the boom but some did not