A Booming Economy
20.1
How did the booming economy of the 1920s lead to
changes in American life?
• During the 1920s, the American economy
experienced tremendous growth. Using
mass production techniques, workers
produced more goods in less time than
ever before.
• The boom changed how Americans lived
and helped create the modern consumer
economy.
The 1920s were a time of rapid economic growth in the
United States.
Much of this boom can be traced to the
automobile.
The Automobile Drives Prosperity
• The Post-WWI recession
ended quickly.
• Stock Prices rose quicklyfactories were producing
more goods.
• Wages were on the risepeople bought more items
• Henry Ford introduced
methods and ideas that
changed production,
wages, and working
conditions , and daily life.
Ford made the Model T affordable by applying mass
production techniques to making cars.
•
A moving assembly line brought cars to
workers, who each added one part.
•
Ford consulted scientific management
experts to make his manufacturing process
more efficient.
•
The time to assemble a Model T dropped
from 12 hours to just 90 minutes.
Ford Pioneers Mass Production
• Ford did not originate “mass production”, he did
however bring it to new heights.
• Ford made the automobile affordable for
everyone.
• The Model T(1908) was a reliable car that sold
for $850
• Opened factory in Detroit, and used the
“assembly line” to shorten the production time.
(12 hrs to 90mins) eventually cost dropped to
$290 by 1927.
• Ford also doubled the wages of his
workers.
• Reduced the workday from 9 to 8 hours.
• In 1926, he became the first to give his
workers the weekends off.
• The Model T & the “5-dollar, 40hour
workday” made Ford one of the shapers of
the modern world.
How the Automobile Changed America
•
Road construction boomed, and new businesses
opened along the routes.
•
Other car-related industries included steel, glass,
rubber, asphalt, gasoline, and insurance.
•
Oil discoveries brought people to the southwest
(Ca, Tx, Ok,)
•
Millions of cars on the road led to service stations,
diners, and motor hotels (motels).
•
Workers could live farther away from their jobs.
•
Families used cars for leisure trips and vacations.
•
Fewer people traveled on trolleys or trains.
• The federal
government began a
numbering system for
all highways in 1926.
• Other forms of
transportation
suffered (trolleys &
RR)
• Cars brought a sense
of autonomy to
Americans.
• Ownership was a
symbol of the
American Dream.
• Suburbs were created
as people were able to
drive to work and live
further away from their
jobs.
• Los Angeles was one of
the first cities to be
affected by the
automobile.
• “A series of suburbs in
search for a city”
A Bustling Economy
• The ‘20s saw a “consumer revolution”, in
which a flood of new, affordable goods
became available.
• Electric washing machines, vacuum
cleaners, and irons made housekeeping
easier and less time consuming.
• Radios and refrigerators.
Advertising and Credit Build
Consumer Culture
• Magazines and newspaper ads focused
on desires and fears of Americans.
• Advertisers celebrated consumption.
• Americans soon were buying products
years prior would have never thought
about. (vacuum)
• Video
• -Installment plans became a way
for everyone to afford the new
products.
• -People now were buying products
that otherwise they could not
afford.
The 1920s saw a consumer revolution.
New products
flooded
the market.
Using installment
buying, people could
buy more.
Advertising
created
demand.
A Bull Market
• Bull market- a period of
raising stock prices.
• Americans began to
invest heavily into the
stock market, hoping to
make quick money.
• Buying on Margin- a form of buying on creditrisky investment practice.
• A buyer paid as little as 10% of the stock
upfront.
• Then the buyer would pay the rest in
installments over a period of months.
• The stock served as collateral.
• Buyers gambled the stock would be worth and
thus sell the stock and make money.
Cities, Suburbs, and Country
• In the 1920’s the urban and suburban life
prospered, however, the rural sections of
the county still felt many hardships.
• Immigrants, farmers, and African
Americans all migrated to the cities.
• Steel changed the way the cities looked.
Skyscrapers soon cluttered the skyline.
• NY’s Empire State Building- 1931
Cities
expanded
outward,
thanks to
automobiles
and mass
transit
systems.
•
More and more
people who
worked in cities
moved to the
suburbs.
•
Suburbs grew
faster than inner
cities.
• America’s wealth during the 20s was
poorly distributed.
• Farm income declined during the decade.
• Farmers suffered from growing debt and
falling farm prices.