The Business of America Under Coolidge

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Presentation transcript:

The Business of America Under Coolidge How Does Coolidge’s Conservative Policies create Economic Growth During the 1920s?

Business flourished under Coolidge Coolidge easily wins 1924 “re-election” Coolidge believes in Laissez Faire economic system, a very pro- business attitude Low taxes, easy credit Keeps tariffs high on foreign imports Investment in stock market Result: Companies make record profits, increase productivity, expand in size and pay workers higher wages

The Automobile Spurs Growth Paved roads and highways are built, best known is Route 66 connecting Chicago to LA Route 66 has businesses along highways including gas stations, motels, restaurants Road improvements incl: first traffic lights, cloverfied traffic pattern & first underwater tunnel (Holland Tunnel connects NJ & NY) More cars creates urban sprawl: cities grow “out” as workers able to drive to work faster

Rise of Consumerism Average annual income rises 35%, people begin buying more More electricity in homes = more electrical appliances Installment plans available to pay for expensive items “enjoy now…pay later” (but pay with interest) More consumerism creates modern advertising Vacuum Electric Iron Refrigerator Washing Machine

Superficial Prosperity Signs of problems to come were ignored Growing income gap between workers & managers (esp due to tax cuts for rich) RR & farming industries declined People buying things on installment plan (credit) monthly payments more than they can afford Overvalued homes & land People gambling on stock market

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