1920’s Business Boom! How does the boom lead to the bust?

“Here was a new generation,…dedicated more than the last to the fear of poverty and the worship of success; grown up to find… all wars fought, all faiths in men shaken.” -F. Scott Fitzgerald, This Side of Paradise

Basics of Economic Boom!  Increased standard of living  Rise of new industries  Changes in consumer behavior  Increased advertising

Increased Spending  Higher wages –Ford doubled workers wages from $2.50 a week to $5.00 a week.  Clever Advertising - How do advertisers today make us buy their products? –Advertisers connected products to the modern era of the 1920’s. –Ex: “Say it with flowers”  New products, especially electric appliances -60,000 families in 1922 had radios -9,000,000 motor vehicles were registered in 1920

Increased Spending  Availability of consumer credit -Attitudes about debt shifted. It was no longer considered shameful. -Advertisers told consumers to “buy now and pay later.” - 75% of the radios purchased in the 1920’s were on credit as were 60% of the cars. -Consumer debt rose from $3 billion dollars in 1921 to $7 billion dollars in  Consumerism – Higher wages and shorter work days resulted buying binge for the 1920’s.

Rise in Productivity  New resources –More access to natural resources such as oil  New management techniques –As companies grew, the number of managers also increased. They were in charge of the different departments in a company. –Impact of assembly line process  Over production?  New technologies –Automobile, Airplane, Electronic appliances  How will these type of things change the way Americans live?

Warning Signs:  What are three different warning signs that the era of Boom is about to become the era of Bust? –1. –2. –3.

Meanwhile, back at the farm…  Even though business was booming in America, many farmers were suffering.  During the war, farmers had been encouraged to grow many crops to support the troops. The crops were needed, which kept prices up. After the war, a major price dropped occurred, which severely hurt farmers.  Also, in the Midwest, farmers were receiving little rain…this would lead to what will later be called the Dust Bowl.