CHAPTER 17 SECTION 2
A GROWING ECONOMY
THE RISE OF NEW INDUSTRIES
 Mass production and the assembly line allowed new
industries, such as automobile and airplane
manufacturing, to grow.
THE ASSEMBLY LINE AND THE MODEL T
 Assembly Line: developed
by Henry Ford—divided
operations into simple
tasks and cut unnecessary
motion to a minimum.
 By 1925-a Ford car was
rolling off the line very 10
seconds.
 Model-T: The “Tin-Lizzie”
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or “flivver”.
Example of “elasticity”—
the economic concept of
how sensitive product
demand is to price.
1908- sold for $850
1914: sold for $490
1925 sold for $295
Lower the cost per car
and increase the
volume of sales:
Business philosophy
High Wages for Workers
 Ford increased workers’
 Strings attached:
wages in 1914 to $5 a
day. (double the salary)
 Also reduced the
workday to 8 hour shifts.
 Did this to build up
workers loyalty and to
undercut union
organizers.
Sociological Department:
 Set requirements
workers had to meet.
 Ex. Renting space to
nonfamily members in
home forbidden.
SOCIAL IMPACT OF THE AUTOMOBILE
 Cars revolutionized American life.
 Eased the isolation of rural life and enabled more
people to live farther from work.
 Other forms of transportation such as the trolley
became less popular.
Consumer Goods
NEW GOODS
 In response to rising
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disposable income—many
other new goods came on the
market.
Electric razors, facial tissues,
frozen foods, hair color
Household cleaning products
Electric irons, washing
machines, refrigerators,
Mouthwash, deodorant,
cosmetics, and perfumes.
Birth of the Airline Industry
 December 1903: Wilbur
and Orville Wright first
crewed powered flight in
history.
 Glenn Curtiss: invented
aerilons (surfaces
attached to wings that
can be tilted to steer the
plane.
 His company began to
build and sell first
airplanes
 1925: Congress passed
the Kelly Act: authorized
the Post Office to
contract with private
airlines to deliver mail.
 1927: Charles Lindbergh
made the solo
transatlantic flight.
 By end of 1928: 48
airlines serving 355
American cities.
RADIO INDUSTRY
 November 1920-news of Harding’s landslide election
win broadcast on KDKA in Pittsburgh—one of first
public broadcasts.
 1926:NBC set up.
 1928: CBS set up.
CONSUMER SOCIETY
Easy Consumer Credit
Managerial Revolution
 The idea of credit
 Industries began to create
became more appealing
in the 1920’s because
people began to believe
in their ability to pay it
off over time.
 Mass Advertising:
Became popular to
persuade people to buy
these new items.
modern organizational
structures.
 Began to split companies
into divisions such as sales,
marketing, and accounting.
 Then needed managers to
run these divisions.
 Helped to expand the size
of the middle class.
WELFARE CAPITALISM
The Decline of Unions
Uneven Prosperity
 Welfare Capitalism:
 Thousands of African
Companies allowed
workers to buy stock,
participate in profitsharing, and receive
medical care and benefits.
 Open Shop: workplace
where employees were not
required to join a union.
 Decline of unions in 1920’s
because of benefit’s
programs.
Americans held factory jobs
during WWI. When
servicemen came home, they
lost those jobs.
 Native Americans were
isolated on reservations
(although granted citizenship
in 1924)
 Immigrants from Europe
found it difficult to get work.
 Deep South was left out of the
economic boom.
THE FARM CRISIS
 American farmers did not share in the prosperity of
the 1920’s.
 They earned approx. 1/3 less than workers in the rest
of the economy.
 Even though technology gave them advancements in
equipment, the demands did not really increase so
prices stayed low.