1920s A Growing Economy
What led to the Economic Boom of
the 1920s?
#1 Assembly Line and Automobile
• Assembly Line – divided
operations into simple tasks
• By 1925, Ford was rolling a
new car off the assembly
line every 10 seconds
– This allowed Ford to lower
the cost and increase his sales
• Auto industry led to growth
in other industries: rubber,
glass, nickel, and lead
• Auto industry lead to
expansion of steel and oil
industry
#2 Consumer Goods
• People had more money
so could afford new
products on the market
• Home products: cleaning
products
• Appliances: irons,
vacuums, washing
machines, refrigerators
• Fashion and Beauty:
mouthwash, deodorant,
cosmetics, perfumes,
electric razors, home hair
color
# 3 Airline Industry
• Samuel Langley was first
to try and build airplane
with money from the War
Department
– Plane broke apart and
crashed
• Wilbur and Orville Wright
flew first plane over Kitty
Hawk, NC on Dec. 17
1903
• Glenn Curtis began
building aircraft and sold
first airplanes to the US
– Orders dramatically
increased during WWI
#4 Radio Industry
• 1926 National Broadcasting
Company set up a network
of stations to broadcast
daily programs
• Sale of radio equipment
grew to nearly billion dollar
industry
• 1928 – CBS set up coast-tocoast network to rival NBC
• Sold advertising time, hired
musicians, actors, and
comedians, and broadcast
presidential campaigns
#5 Easy Consumer Credit
• Prior to 1920s people
considered debt shameful
• 1920s people began
accepting buying on
credit or installment plan
• 75% of radios and 60% of
cars were bought on
installment plan
• Many starting buying on
credit faster than their
incomes increased
#6 Mass Advertising
• New inventions needed
to attract consumers
• Advertising industry
was born to create
consumer demand for
these new products
#7 Managerial Revolution
• Companies began being
split between sales,
marketing, accounting,
etc.
• Needed managers to
run all these divisions
• New managers hired
which helped expand
the middle class
#8 Welfare Capitalism
• Welfare Capitalism –
companies allowed
workers to buy stock,
participate in profit
sharing, and receive
medical care and
pensions
• This gave industrial
workers more disposable
income
• These benefits programs
also led to a decline in
union membership
Uneven Prosperity
• African Americans (forced
to leave factory jobs
when servicemen
returned from WWI),
Native Americans
(isolated on reservations),
Immigrants(struggled to
find work), those in Deep
South, and Farmers did
not experience the
economic boom of the
1920s
Farm Crisis
• Technological advances in
fertilizers, seed varieties, and
farm machinery allowed them
to produce more but with no
increase in demand this led to
lower prices
• Cost of technology continued
to increase
• After WWI farmers, no longer
produced for Allied Forces
• Fordney-McCumber Act –
raised tariffs to protect
American industry from
foreign competition but this
meant they could no longer
sell their crops overseas