A B OOMING E CONOMY 20.1

O BJECTIVES Explain the Impact of Henry Ford and the automobile. Analyze the consumer revolution and the bull market of the 1920s. Compare the different effects of the economic boom on urban and rural America.

K EY P ARTS The Automobile Drives Prosperity A Bustling Economy Cities, Suburbs, and Country

I NTRODUCTION Read Section 20.1 Answer Questions 4&5

T HE A UTOMOBILE D RIVES I NDUSTRY The recession after WWI quickly ended, all signs pointed toward economic growth. The economic boom of the 1920s was the largest that the nation had seen, and stock prices began to rise rapidly. Factories produced more goods and wages were rising so people could afford to buy the goods.

C ONT. A large part of this economic growth came from the automobile industry. Henry for was accounted for mass production and good wages and good working conditions. He was able to create a system of making a large number of individual parts and then having people put them together in sequence. Cars in the early 20 th century were only for the wealthy.

C ONT.. Many countrymen viewed automobiles as a picture of arrogance and wealth. Ransom Olds had introduced a less expensive car called the Oldsmobile in But it was Henry Ford who brought the automobile to the average American. He created the Model T, which was a reliable car that sold for $850.

C ONT … Ford opened his new plant on the Detroit River so he had easy access to steel glass, oil, and rubber that was produced in the states around it. Ford hired scientific management experts to improve his mass-production, this was a new method of improving efficiency.

C ONT …. Ford and his scientific managers studied the technique of meat processing to design his assembly line. He put his cars on a moving assembly line and at each step a worker had to outfit the car with a specific part as it moved along. This decreased the time it took to construct the model T from 12 hours to 90 min.

C ONT ….. This assembly line process allowed Ford to keep dropping the sale price, the cost of a Model T went all the way down to $290 by In 1919 only 10 percent of American homes had an automobile, by 1927, 56 percent did. In 1914 Ford doubled his wages of his workers to $5 a day and reduced their work days to 8 hours.

C ONT …… In 1926 he was the first major industrialist to give his workers Saturday and Sunday off. He was the firs to make a forty hour work week standard. This made Ford extremely rich and one of the shapers of the modern world. The boom in the automotive industry stimulated huge growth in other industries related to car manufacture or use.

C ONT ……. The steel, glass, rubber, asphalt, wood, gasoline, insurance, and road construction industries all benefited. Road construction boomed especially when the federal government introduced the system of numbered highways in Which led to the rapid construction of thousands of service stations, diners, and hotels.

A B USTLING E CONOMY The people in the 1920s saw a consumer revolution, a flood of new affordable goods that became available to the public. Also the widespread availability of electricity allowed for a major boom in house hold appliances. This led to people purchasing items on credit. As well as investing in the stock market.

C ONT. During the 1920s the stock market enjoyed a dizzying bull market, a period of rising stocks. More and more Americans put their money into stocks in a effort to get rich quick. The bull market was very shaky but most people ignored the risk and by the middle of 1929 economic authorities proclaimed that America and the stock market had entered a new era.

C ITIES, S UBURBS, AND C OUNTRY Cities began to develop as they never had before. Cities moved skyward with massive skyscrapers and in 1931 New York finished the tallest building in the world at the time called the Empire State Building. This symbolized the power and majesty of the United States.

C ONT. Suburbs also began to become widespread because of the use of automobiles, people no longer had to live as close to the cities. Typically middle class and wealthy people lived in the suburbs. There was a problem with all of the growth, the farmers were not included in all of the economic growth and they fall further into debt and their prices for their crops did not increase.