Rise of the American Economy Learning Objective: To understand the basis of the economic ‘boom’ in 1920s America.

Boom Boom Boom Learning Outcomes: Explain what an ‘economic boom’ is Identify what caused an economic boom in the USA in the 1920s.

What is an economic boom? An economic boom is a rapid growth in a country’s money making that leads to greater prosperity (wealth) for many people. In America, this growth was based around consumer goods – luxury goods that people wanted to buy but didn’t really need.

Consumerism

Look at your pictures Your pictures highlight some of the causes of the economic boom in America in the 1920’s Match the picture with its caption. Write the title “what was the boom?” Stick the pictures in your book and write the captions next to them.

Passenger aircraft in There were virtually no civilian airlines in By 1930 the new aircraft companies flew 162,000 flights a year. The front cover of a mail order catalogue from 1927 New truck industry in million trucks million trucks Skyscrapers in New York city federal road act =period of intense road building over country. Employed more people than any other industry. 1920’s extent of roads doubled. Sales of consumer goods. Output of American industry doubled in the 1920’s Electricity pylons only a few homes had electricity by 1929 almost all urban homes had electricity. Stockings were a luxury in 1900 but invention of rayon was a cheaper substitute for silk. Cars meant people could drive wherever they wanted and increased size of cities so people could live in the suburbs. Write next to them whether they are.....Industry, Home life, Transport, Cities, (some will be more than one) Write next to them whether they are.....Industry, Home life, Transport, Cities, (some will be more than one) Can you find any connections? Can you find any connections? Using these sources write a 20 word definition of the economic boom of the 1920’s. Using these sources write a 20 word definition of the economic boom of the 1920’s.

Consumer Goods in America GOODS Cars9 Million26 Million Radios60,00010 Million Telephones10 Million20 Million

Why did America Boom? Industrial Strength First World War New Ideas and Industries Republican Policies Confidence

Industrial Strength America had large Natural Resources. Oil – Texas Coal – Kentucky Iron – Chicago America had good farming (agriculture) Cattle Ranching - Colorado

First World War American Industry benefited from selling war goods to Britain and France (food, munitions). The war was fought in Europe – Hugely disrupted British and French economies as resources had to be diverted for the war effort.

First World War Many Countries ended up borrowing huge sums of money from the USA – At the end of the war Britain owed America £900 million. America took over European overseas markets – eg. America took over Germany as leading exporter for chemicals.

US Exports ($ Millions)

New Ideas and Industries The 1920s saw a dramatic change in American society, for example: Henry Ford ran the Ford Motor Company. It made the most famous car in the 1920s – The Model T By 1929 they were making more than 1 car a minute. This was made possible by mass production and the use of the assembly line – The cars were moved along whilst workers did repetitive tasks all day (it might be your job to put on the wheels).

Prosperity More people had jobs More cars were made New Opportunities Older industries grow More parts are needed Petrol Stations Steel Glass Rubber Leather Road building Motels

Republican Policies Laissez Faire – Means leave alone. Republicans believed that if the government didn’t interfere with people lives then they would be free to make money. Tariffs – Taxes placed on imported goods which forced Americans to buy American goods.

Republican Policies Low Taxes – so people had more money to spend thus helping the economy grow. Rugged Individualism – People achieve success by their own hard work. Term used by President Herbert Hoover

Confidence All of the factors you have seen for the economic boom helped make Americans feel more confident. Americans felt so confident that in the 1920s they started to borrow money to buy goods. Companies increasingly offered ‘Hire Purchase’. Eg. Pay for a car in instalments

Causes of the Boom! CauseDetailsHow it helped the Boom. Impact of WW1USA sold goods to Europe. They were undamaged by WW1. Natural ResourcesUSA was self-sufficient - didn’t need imports from other countries. Republican Policies‘Lassiez Faire’ - government didn’t interfere in business. Import Tariffs introduced. Mass ProductionNew techniques meant that goods could be produced much more cheaply. Mass MarketingHuge amounts spent on advertising. Travelling Salesmen. CreditAllowed people to borrow money. Kept the economy going. ConfidenceAmerica’s economic confidence was sky- high. People invested more & more

2. As they were neutral for the majority of WW1, America’s Economic Boom of the 1920s 6. Mail order meant 3. A refined system of mass production was introduced. 4. A new concept of buying things on credit was introduced. 5. A culture of keeping up was formed 1.The USA was a goldmine-literally. 8. Everyone got a piece of the American stock market The Republican Government under Harding took a laid back approach to business,.

Causes of the Boom! CauseDetailsHow it helped the Boom. Impact of WW1USA sold goods to Europe. They were undamaged by WW1. USA became the richest country & a World Leader. Natural ResourcesUSA was self-sufficient - didn’t need imports from other countries. They don’t have to waste their money to other countries. Republican Policies‘Lassiez Faire’ - government didn’t interfere in business. Import Tariffs introduced. Encouraged business to re-invest in industry. Encouraged people to buy American goods. Mass ProductionNew techniques meant that goods could be produced much more cheaply. Products were cheaper & more affordable. Mass MarketingHuge amounts spent on advertising. Travelling Salesmen. Encouraged people to buy goods. Advertising became a business itself. CreditAllowed people to borrow money. Kept the economy going. Encouraged people to buy goods, they otherwise wouldn’t have been able to afford. ConfidenceAmerica’s economic confidence was sky- high. People invested more & more This kept the cycle of prosperity going.

2. As they were neutral for the majority of WW1, America were able to make huge profits from weapons and food sales to European countries that didn’t have the resources or time to make them themselves. America’s Economic Boom of the 1920s 6. Mail order meant that consumer goods could reach a far wider audience. People who lived isolated from civilisation could now become the proud owners of a T- Model Ford. Which meant the rise of the motor car. 3. A refined system of mass production was introduced. This involved many workers on an assembly line doing simple specific tasks. This method of production allowed goods to be made faster and for much less money. 4. A new concept of buying things on credit was introduced. This made buying consumer goods more accessible to the majority of the American public. Also the system of hire Purchase was established. This meant that people could pay for items in instalments. 5. A culture of keeping up was formed thanks to the many ways in which companies started t advertise their products. The ad- verts started a must have culture, with families al- ways trying to have the latest model of a prod- uct. 1. The USA was a goldmine-literally. There was inordinate amounts of raw materials including the invaluable oil. Also because of the expanse of America there was a lot of land for farming, to make the food to sell to European Nations engulfed in war 8. Everyone got a piece of the American stock market saw a share price rise of 500%. It seemed the only way was up. 7. The Republican Government under Harding took a laid back approach to business, leaving it to the experts so to speak. Tariffs were placed on foreign goods so buying American products was much cheaper. The more money companies made the more money workers had to spend and the bigger a company got the more workers it employed.

Plenary Complete your own concept map on the ‘Economic Boom’. Use the words in the box to help you. The images will help you start. Economic Boom What caused the Boom? What did the Boom create? Who helped kick start the Boom? Was the Boom a good thing for Americans? Consumerism Radio Cars Refrigerator Republicans WW1 Exports Industry ‘Hire Purchase’ Confidence Jobs Opportunities Resources Oil Coal Agriculture Consumerism Radio Cars Refrigerator Republicans WW1 Exports Industry ‘Hire Purchase’ Confidence Jobs Opportunities Resources Oil Coal Agriculture