What was the American Boom?

The boom took place when the American economy began to grow rapidly during the 1920s
Features of the boom:
1. Increase in sales of consumer goods
2. More building was being done than ever before including sky scrapers
3. Cities expanded (cars meant americans could live in the suburbs in their own houses on the edge of towns.
4. Road building led to increased employment
5. People could now afford luxury items that were only available for the rich before e.g. stockings and vacuum cleaners
6. Mail order industry meant people began to use services such as mail order catalogues
Why was there a boom in the 1920s?
1. America's natural resources and industrial strength (oil,coal,metals etc)
  1. America was leading the world in most areas of industry (steel, coal + textile production)
  2. Bets at developing new technology inc. cars, telephones + electric lighting
  3. New industries (chemical and film) were growing fast
  4. Had a growing pop. that mostly lived in towns and cities
  5. People who worked in the cities in industry or commerce earned more than people working on farms so they provided the most important market for American companies
  6. American companies were selling more + more products abroad (Europe, latin america, Far east)
  7. American agriculture was the most efficient and productive in the world
2. WW1
  1. Americans sold large amounts of arms and food to the allies, this gave a big boost to American businesses
  2. The War damaged the German chemical industry and helped the American one so by the end of ww1 it was much bigger
  3. The USA only fought in the war for a short amount of time so their resources were not drained and America itself was not damged either unlike European countries
3. Republican policies
  1. Laissez-faire: The belief that the government shouldn't interfere in everyday lives of the people and the president should leave businessmen alone to help with prosperity. This caused the government to have low taxes and to allow trusts, it gave freedom to american businesses to grow and prosper, there were few laws about working conditions, workers' right and no min, wage
  2. Tariffs: Put tax on products coming into the USA, making it expensive to import foreign goods into America. These protected American businesses from foreign competition.
  3. Low taxes: Kept taxes as low as possible to encourage people to spend the money on American products instead and the rich would invest in American businesses.
  4. Trusts: Huge super-companies dominated 1 sector of industry e.g. oil + steel. Being in nearly total control of an industry reduced competition and allowed certain people to become rich.
4. New industries and new methods of production
  1. Consumer goods: American's huge resources led to increased production of steel, glass, chemicals and machinery.Telephones, radios, vacuum cleaners, washing machines were mass produced on a huge scale. This made them cheaper so more people could afford to buy them and they sold in huge numbers.
  2. Marketing and Advertising: Big companies used new sales and marketing techniques to get people to buy their goods. Mass advertising was used to set up advertising agencies to sell cars, clothes, cigarettes etc. Posters, radio adverts and travelling salesmen all encouraged Americans to spend.
  3. Credit: Not everyone could afford new consumer goods so they were able to borrow money on credit or take part in a "hire purchase" scheme where they would buy now and pay (gradually) later. This was used mainly for cars and radios.
  4. Motor-car industry: Moving production line was set up by Henry Ford in 1913, each worker had only 1 or 2 small jobs to do as the skeleton of the car moved past. This made it much cheaper and faster to build a car. The motor- car industry was the biggest in the USA, it employed hundreds of thousands of people and kept workers in various other industries employed that supplied materials for the cars e.g. glass, leather, rubber and steel. It needed petrol to run so this boosted American oil industry. People were employed to build new roads for the cars to drive on. The car made it possible for people to live far from work, this boosted house building as people moved out to the new suburbs on the edge of the expanding cities.
  5. The American "State of mind": Americans believed they had the right to "prosperity" and believed that spending money and consuming more and more was very american and even a good thing to do.
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	Created by canel over 11 years ago