Money spell

Economic changes of the 1920s USA AQA GCSE

  • Absence from WW1

    Absence from WW1
    Before WW1 U.S had grown in industrial strength ( had huge amount of natural resources like timer, wood and oil)
    U.S didn't join war immediately due to Isolationism policies- when U.S delcined to interfere with foreign countries' affairs
    U.S joined the war in 1917
    During war U.S lent money to European countries + sold ammunition/ arms to Britain + France making U.S extremely wealthy!
  • African Americans

    African Americans
    Life was particulary hard for African Americans in Southern states.
    3/4 of a million lost their jobs during the '20s.
    Many AA's worked as farmer laborers/ were sharecroppers (pay to use land)
    When the price of crops fell, AA's either sacked/ not given full wages.
    As a result, 1000's of AAs moved to Northern states eg Chicago, New York + Detroit
    AA's living in extreme poverty and areas called 'ghettos' which were the poorest parts of cities which had high unemployment and crime rates.
  • Workers in old industries

    Workers in old industries
    Workers in coal, leather and textile industries did not profit from the 'boom'.
    Traditional industries failed to respond to the mass-production methods of the 1920s
    E.g price of coal fell due to availability to electricity + not enough people wanted to buy it
    Cotton industry hit during boom as new synthetic fibres like rayon were being developed, which became a very popular substitute to cotton.
  • Native Americans

    Native Americans
    Native Americans lost most of their land, which was seized by mining and ranching companies
    Native Americans were forced to live on reservations- ( often the worst land, difficult to grow crops)
    This also made it harder for NA's follow their traditional way of life
    Most NA's lived in poverty and had lower quality education
    NA also had shortest life expectancy than any other ethnic group in the U.S
  • Republican policies

    Republican policies
    Republican presidents like:
    WH, HH, and CC
    were pro-business and their policies helped 'boom' continue
    Republicans believed in:
    Laissez-faire- government shouldn't intefere with people's everyday lives, businessmen should be free to make profit.
    Tarrifs- R's wanted foreign goods to be more expensive than U.S goods helping industry to thrive
    Low taxation- R's lowered taxes, and tax rates slashed from over 70% to less than 25% ppl had more disposable income, + stimulated the economy.
  • Mass Production

    Mass Production
    Best e.g of mass-production is the car/automobile
    Car production revolutionised by Henry Ford in the '20s
    Ford hired 1000s unskilled workers on $5 average pay a day to make cars
    More than 15 mil made between 1908-1925, came off production line at a rate of 1 every 10 secs!
    Prices of cars dropped from $940 in 1920 to $290 in 1929
    other industries like glass industry involed in production of cars
    Car led to construction of roads and suburbs
    By 1929, there were 1 mil miles of road and 26 mil cars.
  • No. of millionares grow whilst others suffer

    1920's saw a growing number of millionares in the U.S there were around 15,000 millionares by 1927. However, there were 6 million families living on less than $1000 per year. This was around 40% of the country
  • Farmers

    Farmers prospered during ww1, but suffered the most after war. Income of farmer was $275 whereas national average was $750. 1928, 50% farmers living in poverty
    Main reasons farmers suffered during boom:
    Overproduction- producing more than needed
    New machinery- food more accessible price drops farmers make less money
    Debt from banks - borrowed money in order to survive, by 1929, in crippling debt of $2 billion, forced to sell farms, roughlu 600,000 farmers losing land in 1924 alone.
  • Consumer society

    Consumer society
    New goods available to Americans for the first time e.g the telephone, radio + vacuum cleaner Goods mass produced on vast scale made products cheaper
    In 1920 60,000 radios sold this increased to 10 mil in 1929
    Industries using new techniques to advertise their goods
    Poster, radio advertisement,
    Hire purchase- form of credit where customer paid for a good in instalments at interest rates
    This led to an increased demand for goods
    Boom in stock market ppl bought shares, (100,00s giving savings)
  • New Technology

    New Technology
    In 1914 30% of American factories had electricity, by 1929 this was 70%
    It was believed that mass production was less effective without electricity
    Electrification of America led to a new range of consumer goods such as radios and washing machines
    Availability of credit meant more money for Americans to use their disposable income on electric goods