Key Q 1: How far did the US economy BOOM in 1920s? REASONS FOR THE BOOM Republican policies: The Presidents during the 1920s were all Republicans and they believed in laissez-faire and rugged individualism which meant they believed that the government should not interfere in business. That meant low tax, few controls of working conditions and no support for trade unions. So businesses were free to grow and make as much profit as they could without fear of interfeeance. They also believe in tariffs; these are taxes put on foreign goods coming into a country so that US citizens were more likely to buy American products. Mass Production: A car took a very long time to make in 1900 with a handful of skilled people making the whole thing. Ford revolutionised the industry by setting up an assembly line so that the car was built in stages as it moved along a conveyor belt. Each person working would do one job over and over again, so they got really quick and good at doing it. It took 14hrs to make a Ford Model T in 1913 but after the conveyor belt was installed in the ford factory the time went down to 93 minutes. If you make more of something you can afford to sell them cheaper and still make a lot of money (as more people could afford them) so the price of a Model T dropped from $950 to $550. Lots of other industries copied this method. Why didn’t some traditional industries benefit? Mass production: Was a huge benefit to some companies but for others it was impossible to use e.g. coal mining. New alternatives: Cars affected the railroad companies. Electricity and oil affected coal. New man-made materials affected cotton industry. The First World War: The Allies were in debt to the USA to the sum of $10.5 billion after WW1 because countries like Britain and France had borrowed huge sums from US banks to keep paying for the war. This meant $10.5 billion plus interest would flow into the USA after the war. Also, whilst allies were distracted fighting in Europe, US didn’t join in until 1917 and they spent the years 1914-17 taking over economic markets that the allies were neglecting due to the war. Specifically a lot of trade with Asia, which had previously been a part of the world that European companies had invested in. Also companies made a lot of money selling products to Europe during the war. What was the stock market boom? Stocks and shares: Some companies might want to raise money to expand, so they can offer to sell part of their company or parts (shares) to people. In return the share holders get a share of the profit if there is profit (dividend). Why didn’t farmers benefit? Overproduction: During WW1 farmers could produce as much as they liked and still have somewhere to sell to (Europe) so many farmers took out loans to buy more land so they could grow more and make more money. When the war ended and Europe recovered there was less demand. Farmers found they were producing too much so the price of crops dropped and they couldn’t make ends meet. Many went out of business. Why were people investing in 1920s?: As the economy was healthy and companies often made big profits, people were interested in investing in the stock market. In 1920 there were 4 million shareholders in the US but by 1929 this was 20 million. Credit: The availability of credit meant that people could buy a product but pay for it in instalments later. So things like cars were far too expensive for most people to buy outright and relatively few were sold until credit was more widely available in the 1920s. This meant more goods were sold like radios, fridges, cars etc... so more people were need to make them, more people had jobs as a result and more people had money to spend on things like radios, fridges, cars etc...(This is known as a cycle of prosperity). Buying on the margin: This was borrowing money from a bank to buy shares, then when the price of the shares rise you can pay back the loan and the interest but still have a nice profit to show for it for yourself. Lots of people did this; US banks lent $9 billion for people to speculate on the stock market in 1929. Tariffs: Protected US businesses by getting Americans to buy from US businesses but other countries reacted by putting tariffs on US goods coming into their countries. This made it more difficult to farmers to sell abroad. Competition: Efficient Canadian wheat farmers were increasing competition and making it difficult for US farmers to sell abroad as foreign competition could often afford to sell cheaper. Advertising: Growth in advertising industry (helped by radio growth + roadside billboards due to car growth), helped to convince people they NEEDED things. Also made people fill they had to have things to keep up. By 1929 $3billion per year was being spent in USA on advertising by US companies. Speculation: Risking money to invest in stocks. A gamble on the stock market. Many people from poor individuals to wealthy banks risked money on the stock market in the US in the 1920s. Wrong to say everyone though.

Key Q 1: How far did the US economy BOOM in 1920s? Key Q 2: How far was the US a free and equal society in the 1920s? KeyQ 3: What were causes + consequences of Wall St Crash? Key Q4: How successful was the New Deal? On what was the economic boom based? Why did some industries prosper while some did not? Why did agriculture not share in the prosperity? Did all Americans benefit from the boom? How widespread was racial intolerance in US society? What were the ‘Roaring Twenties’? Why was prohibition introduced, and then later repealed? How far did the roles of women change during the 1920s? How far was speculation responsible for the Wall Street Crash? What impact did the Crash have on the economy? What were the social consequences of the Crash? Why did Roosevelt win the election of 1932? What was ‘the New Deal’ as introduced in 1933? How far did the character of the New Deal change after 1933? Why did the New Deal encounter opposition? Did all Americans benefit from the New Deal? Did the fact that the New Deal did not solve unemployment mean that it was a failure? Society and changing attitudes in the 1920s; race relations and discrimination against African Americans; the Ku Klux Klan; the ‘Roaring Twenties’; film and other media; the Red Scare; the case of Sacco and Vanzetti; prohibition and reasons for its repeal in 1934; gangsterism and corruption; change and continuity in the roles of women. The impact of the First World War on the American economy; the expansion of the US economy during the 1920s; mass production in the car and consumer durables industries; the fortunes of older industries; the development and impact of credit, hire purchase and advertising; increase in standard of living and consumerism; the decline of agriculture; weakness in the economy by the late 1920s. The Wall Street Crash and its financial effects; the economic and social effects for Americans in urban areas and in the countryside; the reaction of President Hoover to the Crash and the Depression; the Bonus Marchers and ‘Hoovervilles’; the Presidential election of 1932; Hoover’s and Roosevelt’s programmes; reasons why Roosevelt won; the contrast between Roosevelt’s and Hoover’s views of the role of government. Roosevelt’s Hundred Days; the New Deal legislation; the ‘alphabet’ agencies and their work and the economic and social changes they caused; the Second New Deal; the election of 1936; opposition to the New Deal from the Republicans, the rich, business interests, the Supreme Court and radical critics like Huey Long; the strengths and weaknesses of the New Deal programme in dealing with unemployment and the Depression; the extent of the impact of the New Deal on the lives of people and the American economy; the impact of the Second World War on the American economy.