1. A GROWING ECONOMY
Chapter 10 Section 2

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.

3. 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

4. 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)

5. 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)

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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
Airlines serving 355 American Cities

12. 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
stations, caused radio equipment sales to rise dramatically
million radios in use across country

13. 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

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

15. 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

16. 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

17. 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

18. 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

19. 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)

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

21. 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

22. 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

23. THE FARM CRISIS Helping Farmers
Some in congress tried to help farmers with surplus
From 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

24. 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