A GROWING ECONOMY Chapter 10 Section 2.

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Chapter 10 Section 2 A Growing Economy
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Presentation transcript:

A GROWING ECONOMY Chapter 10 Section 2

A GROWING ECONOMY THE RISE OF NEW INDUSTRIES Main Idea Mass production and the assembly line allowed new industries, such as automobile and airplane manufacturing to grow.

THE RISE OF NEW INDUSTRIES By the 1920s automobile became an accepted part of American life. More people had cars then indoor plumbing The automobile was just one part of a rising standard of living experienced in the 1920s American’s wages increased and work hours decreased (from 12-8 hour days and from 6 – 5 day weeks These changes were able to take place due to mass production increasing price and reducing costs

THE RISE OF NEW INDUSTRIES The assembly line changed the way American factories worked 1913 Ford installed the first moving assembly line Divided operations into simple tasks Cut unnecessary motion to a minimum Produced an automobile every 93 minutes (as opposed to every 12 hours)

THE RISE OF NEW INDUSTRIES Ford’s assembly line product, Model T, demonstrated economic concept of elasticity How sensitive product demand is to price 1908 Model T’s cost $850 by 1917 price down to $360 Business philosophy: lower the cost per car and thereby increase the volume of sales Low prices created an immense market for cars and opened door for imitators (like General Motors)

THE RISE OF NEW INDUSTRIES Ford also increased workers wages (doubled wages) and reduced workday Build workers loyalty and undermined union organizations Strings attached to pay raise: created ‘Sociological Department’ with requirements workers had to meet Example, renting out space from your home forbidden Break rules and disqualified from extra pay, suspended or fired

THE RISE OF NEW INDUSTRIES Cars revolutionized American life Eased isolation of rural life Enabled more people to live farther from work Auto commuter developed and urban transportation (like trolleys) became less popular

THE RISE OF NEW INDUSTRIES With more disposable income, other new goods came on the market Electric razors Facial tissues Frozen foods Home hair color Home products like cleaning supplies(due to indoor plumbing), new appliances (electric irons, vacuums etc.) Fashion concerns created mouthwash, deodorants and cosmetics

THE RISE OF NEW INDUSTRIES Birth of the Airline Industry Early 1900s many tried to create 1st airplane to carry human Samuel Langley (secretary of Smithsonian) best known for his attempt Built small model airplanes with steam engines War Department paid $50,000 to develop airplane to carry a person When brought to trial, failed Wilbur and Orville Wright (from Ohio) made the first flight on December 17th 1903 spent $1,000 of their own money Found problems of old planes and made one with better wings, propeller and strong but light engine

THE RISE OF NEW INDUSTRIES After first flight airline industry developed rapidly Leader was inventor Glen Curtiss, became director of experiments at Aerial Experiment Association Invented Ailerons Surfaces attached to wings that can be tilted to steer the plane… still used today Curtiss’s company began building aircraft and sold first airplanes in US Grew to industrial enterprise during World War 1

THE RISE OF NEW INDUSTRIES When Curtiss and other entrepreneurs began building practical aircraft, federal government began supporting them In 1918 worlds first Airmail service traveled from Washington DC to New York 1919 expanded Airmail across the continent 1925 Kelly Act passed by congress Allow postal offices to contract with private airplane operators to carry mail Former Airmail pilot Charles Lindberg made first transatlantic solo flight in 1927 1928 48 Airlines serving 355 American Cities

THE RISE OF NEW INDUSTRIES The Radio Industry 1913 Edwin Armstrong invented special circuit that made it practical to transmit sound via long-range radio … radio industry began November 1920 Westinghouse Company broadcast news of Harding's landslide election from Pittsburgh, one of first public broadcasts in history 1926 National Broadcasting Company (NBC) set up network of stations to broadcast programs 1927 700 stations, caused radio equipment sales to rise dramatically 1929 10 million radios in use across country

THE RISE OF NEW INDUSTRIES 1929 Columbia Broadcasting System (CBS) assembled coast-to-coast network to rival CBS Both networks sold advertising time and hired actors, musicians and comedians to appear on shows First presidential election campaign to use radio broadcasts in 1928

A GROWING ECONOMY THE CONSUMER SOCIETY Main Idea Consumer credit and advertising helped to create a nation of consumers

THE CONSUMER SOCIETY Easy Consumer Credit Economic boom = growth of individual borrowing Before 1920s most considered debt shameful Now people believed could pay debts overtime changed idea of debt “Buy now and pay in easy installments” Americans bought 75% of their radios and 60% of automobiles on installment plan

THE CONSUMER SOCIETY MASS ADVERTISING Otto Rohwedder developed commercial bread slicer in 1928 Problem, no one knew sliced bread was needed (problem of inventors) Attract consumers, manufactures turned to advertising (new industry 1920s) Advertisers linked products with qualities associated with modern era Convenience, leisure, success and style Advertisers also preyed on fears and anxieties

THE CONSUMER SOCIETY The Managerial Revolution Industries began creating modern organizational structures Companies split into divisions with different functions (example: Sales, marketing) To run divisions needed to hire managers (freed owners from these assignments) Created new career (professional manager) Large numbers of managers expanded middle class added to prosperity Engineers also in high demand, joined middle class

THE CONSUMER SOCIETY Welfare Capitalism Industrial workers also had more disposable income Part due to welfare capitalism Companies allowed workers to buy stock, participate in profit sharing and receive medical care and pensions Decline of Unions Benefits programs made unions seem unnecessary to many works 1920s Unions lost influence and membership Employers promoted open shop Spend more to improve quality of life

THE CONSUMER SOCIETY UNEVEN PROSPERITY Not all Americans shared in economic boom African Americans lost jobs when servicemen returned from World War 1 Native Americans were also excluded even though granted citizenship in 1924 but isolated on reservations Majority of Immigrants still came from Europe and could only find low paying jobs Deep south was also left out of economic boom (mainly farmers who in general didn’t benefit)

A GROWING ECONOMY THE FARM CRISIS Main Idea Increases in farm productivity and decreases in foreign markets led to lower prices for farmers

THE FARM CRISIS American farmers did not share in prosperity of 1920s Earned less than one third of the income of workers in rest of economy Produced more due to new technology BUT was not an demand increase so had lower prices At the same time the cost of improved farming technology increased

THE FARM CRISIS Changing Market Conditions Many factors contributed to farmers “quiet depression” During war government wanted farmers to produce more so they borrowed to buy new land Sales were strong and prices high so farmers did well After war, didn’t need as much because European farmers started producing and didn’t have money to spend on American farm products Congress made worse when passed Fordney-McCumber Act 1922 Raised tariffs to protect American industry so Europe not buy from American farmers…prices fell

THE FARM CRISIS Helping Farmers Some in congress tried to help farmers with surplus From 1924-1928 Senator Charles McNary and Representative Gilbert Haugen of Iowa proposed McNary-Haugen Bill Plan in government would boost farm prices by buying up surpluses and selling them overseas Congress passed bill twice but President Coolidge vetoed it both times Said this would make farmers want to produce even more goods to sell to government Farmers in recession throughout 1920s

Summary Questions How did the automobile change the way people lived? How did advertisers try to convince Americans to by their products? What factors led to the growing economic crisis in farming? How did the availability of credit change society? Make a graphic organizer like the one below on your paper and fill out New Industries in the 1920s