US Economy (1919-1929)

Jack Thorpej
Mind Map by Jack Thorpej, updated more than 1 year ago
Jack Thorpej
Created by Jack Thorpej over 4 years ago
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US economy 1919-1929

Resource summary

US Economy (1919-1929)
  1. Agriculture
    1. Prosperity (pre 1920)
      1. 30 million people employed in farming
        1. Returning solders saw farming as quick way to get money
          1. Took out lones
        2. 8 million hectares new farmed (post/during war)
          1. 1917- Henry Ford made Fordson Tractor
            1. 750,000 sold in ten years
            2. Combine Harvester increased yield speed
              1. Making more food than needed
              2. Overproduction (in 1920)
                1. In early 1920s, demand for US food decreased
                  1. Europe reestablishing economy
                  2. Tariffs introduced to help farmers
                    1. Fordney McCumber Act (1922)
                      1. Taxed other countries imports to US
                      2. Emergency Tariff Act
                        1. Increased price on imported food for Americans
                          1. Encouraged America to buy American food
                        2. McNary-Haugen Farm Relief Bill
                          1. It would buy crops at 1914 price ( surplus stored)
                            1. Vetoed By COOLIDGE- LAISSEZ FAIRE
                      3. Unemployment (in 1920)
                        1. Machinery and Overproduction led to falling prices
                          1. Wheat per Bushel fell from $183 (1920) to 38 cents (1929)
                          2. In 1920 , 3 mil farmers lived on less than $1000 per annum
                            1. In 1924- 600,000 farmers went bankrupt
                              1. First time in US history for no. of farmers decreasing
                                1. Rural Areas- No electricity
                                  1. Excluded from benefits of boom
                              2. Declining Industries
                                1. New Industries made consumer goods
                                  1. As wages rose , demand for consumer goods rose.
                                  2. Examples
                                    1. Coal
                                      1. Replaced by Electrical/Oil/ Steam Power
                                      2. Wool/Cotton
                                        1. Replaced by man-made fibres
                                      3. Why?
                                        1. Could not utilise Henry Fords methods of production
                                          1. Relied on Government contracts and big business orders
                                            1. Less post WW1
                                              1. Ship sales decrease. cant use mass production
                                            2. City Based boom- Rural Areas lost jobs
                                          2. Impact of the First World War
                                            1. US factories were barely affected by the war
                                              1. Took control of dye/fertiliser and plastic exports from the Germans.
                                                1. Initially little competition from wartorn Europe
                                                2. Led to Economic Boom
                                                  1. Farmers had increased exports during the war to 300%
                                                    1. Europe owed US investors 10.3 billion dollars
                                                  2. Isolationism
                                                    1. Isolationanism
                                                      1. Public was not keen to get involved in World Politics
                                                        1. America refused league of nations
                                                          1. Even after it was set up by Woodrow Wilson
                                                      2. Tariffs
                                                        1. June 1921- Budget and Accounting Act
                                                          1. Put controls on government spending
                                                          2. May 1921- Emergency Tariff Act
                                                            1. Increased import taxes on wheat, sugar ect
                                                            2. November 1921- Revenue Act
                                                              1. Charging businesses more , but cutting wartime tax on high level profits
                                                              2. September 1922- Fordney McCumber Tariff Act
                                                                1. Raised tariffs on industrial goods
                                                                2. Caused retaliation in Europe
                                                                  1. Taxes were placed on American Exports
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