1. From War to Peace
19.2 A New Economic Era

2. Ford Revolutionizes Industry
The first cars in America appeared in the 1800’s but remained a toy for the rich through the early 1900’s
During the 1920’s, the Model T appeared and became a fixture of American life
The Model T

3. The Assembly Line
Custom-made cars were extremely expensive to build . . .
Ford had to come up with a way to make production cheaper if he wanted to create a “motor car for the great multitude”
Enter the Assembly Line!
A production system in which the item being built moves along a conveyor belt to various workstations
On Ford’s assembly line there were eighty-four specific jobs
In it’s first year, the Ford assembly line produced a car every hour and a half
Ford’s employees made an average of five dollars per day, enabling them to buy cars

4. The Conveyor Belt
“The man who puts on a bolt does not put on a nut. The man who puts on the nut does not tighten it.”

5. The Model T
The car sold for under $500, about half the cost of the first Model T’s
The price still wasn’t cheap, but many more people could afford it
By the 1920’s, Ford was rolling out a car every minute and the price had dropped even lower
By 1922, twenty-two million cars were rolling along the unpaved roads of the nation

6. The Effect on Industry
During the first quarter of the century, Ford dominated automaking, but in the 1920’s Chrysler and General Motors began to improve upon Ford’s design
Competition in the industry led to vast economic growth, and other industries also learned from Ford and his assembly line

7. Welfare Capitalism
The success of business in the 1920’s led to a growth of what is called ‘welfare capitalism’ in an effort to defeat organized labor
A system in which companies provide benefits to employees in an effort to promote worker satisfaction and loyalty.
Health insurance
Pensions/Retirement plans

8. Industry Changes Society
Demand for steel, glass, rubber, etc all increased
Repair shops began to spring up
Motels and restaurants arose to meet the needs of travelers; this produced a new industry - tourism
Gas became a hot commodity
Suburbs began to pop up everywhere
The auto industry put the city of Detroit, MI - where Ford’s manufacturing operations were located - on the map . . .
In 1910, fewer than 500,000 people lived there; within twenty years the population had tripled

9. The New Consumer Electrical appliances Passenger airplanes
New Products
Electrical appliances
Refrigerators
Vacuums
Radios
Passenger airplanes
New Ways to Pay
Installment buying
Paying for an item over time in small payments instead of paying for an item in full
‘Credit’ a.k.a. borrowing money with a promise to re-pay
By the end of the decade, consumers bought ninety percent of durable, long-lasting goods (i.e., cars and appliances) on credit

10. Weaknesses in the Economy
The era that brought the boom in cars, consumer goods, radio, and advertising earned the nickname ‘The Roaring Twenties’
The farmers, however, did not get to take part in the fortune the rest of the nation was enjoying
European farmers drove down US prices
Insects infested and destroyed cotton crops in the South
The Mississippi River flooded, drowning crops in the South
“The Big Blow”, the strongest hurricane recorded up to that time occurred in Florida
One of the most destructive hurricanes ever

11. Assignment: Reviewing Ideas, Terms, and People (Pg. 633)
1. What was the assembly line? How did it affect Ford’s ability to make automobiles?
2. What was the effect of the boom in the auto industry on other industries? Why could industrial changes be said to change the map of the United States?
3. Write a brief definition for each of the following terms: installment buying, credit
4. What change occurred in consumer attitudes in the 1920’s compared to earlier times? How did the changes in consumer behavior make possible the growth of the American economy in the 1920’s?
5. What part of the American economy did not enjoy prosperity in the 1920’s?