A Booming Economy

20.1

How did the booming economy of the 1920s lead to changes in American life?

• During the 1920s, the American economy experienced tremendous growth. Using mass production techniques, workers produced more goods in less time than ever before.

• The boom changed how Americans lived and helped create the modern consumer economy.

The 1920s were a time of rapid economic growth in the United States.

Much of this boom can be traced to the automobile.

The Automobile Drives Prosperity

• The Post-WWI recession ended quickly.

• Stock Prices rose quickly- factories were producing more goods.

• Wages were on the rise- people bought more items

• Henry Ford introduced methods and ideas that changed production, wages, and working conditions , and daily life.

Ford made the Model T affordable by applying mass production techniques to making cars.

• A moving assembly line brought cars to workers, who each added one part.

• Ford consulted scientific management experts to make his manufacturing process more efficient.

• The time to assemble a Model T dropped from 12 hours to just 90 minutes.

Ford Pioneers Mass Production• Ford did not originate “mass production”, he did

however bring it to new heights. • Ford made the automobile affordable for

everyone.• The Model T(1908) was a reliable car that sold

for $850• Opened factory in Detroit, and used the

“assembly line” to shorten the production time. (12 hrs to 90mins) eventually cost dropped to $290 by 1927.

• Ford also doubled the wages of his workers.

• Reduced the workday from 9 to 8 hours.• In 1926, he became the first to give his

workers the weekends off.• The Model T & the “5-dollar, 40hour

workday” made Ford one of the shapers of the modern world.

How the Automobile Changed America

• Road construction boomed, and new businesses opened along the routes.

• Other car-related industries included steel, glass, rubber, asphalt, gasoline, and insurance.

• Oil discoveries brought people to the southwest (Ca, Tx, Ok,)

• Millions of cars on the road led to service stations, diners, and motor hotels (motels).

• Workers could live farther away from their jobs.

• Families used cars for leisure trips and vacations.

• Fewer people traveled on trolleys or trains.

• The federal government began a numbering system for all highways in 1926.

• Other forms of transportation suffered (trolleys & RR)

• Cars brought a sense of autonomy to Americans.

• Ownership was a symbol of the American Dream.

• Suburbs were created as people were able to drive to work and live further away from their jobs.

• Los Angeles was one of the first cities to be affected by the automobile.

• “A series of suburbs in search for a city”

A Bustling Economy

• The ‘20s saw a “consumer revolution”, in which a flood of new, affordable goods became available.

• Electric washing machines, vacuum cleaners, and irons made housekeeping easier and less time consuming.

• Radios and refrigerators.

Advertising and Credit Build Consumer Culture

• Magazines and newspaper ads focused on desires and fears of Americans.

• Advertisers celebrated consumption.• Americans soon were buying products

years prior would have never thought about. (vacuum)

• Video

• -Installment plans became a way for everyone to afford the new products.

• -People now were buying products that otherwise they could not afford.

The 1920s saw a consumer revolution.

Using installment buying, people could buy more.

Advertising created demand.

New products flooded the market.

A Bull Market

• Bull market- a period of raising stock prices.

• Americans began to invest heavily into the stock market, hoping to make quick money.

• Buying on Margin- a form of buying on credit- risky investment practice.

• A buyer paid as little as 10% of the stock upfront.

• Then the buyer would pay the rest in installments over a period of months.

• The stock served as collateral.

• Buyers gambled the stock would be worth and thus sell the stock and make money.

Cities, Suburbs, and Country

• In the 1920’s the urban and suburban life prospered, however, the rural sections of the county still felt many hardships.

• Immigrants, farmers, and African Americans all migrated to the cities.

• Steel changed the way the cities looked. Skyscrapers soon cluttered the skyline.

• NY’s Empire State Building- 1931

• More and more people who worked in cities moved to the suburbs.

• Suburbs grew faster than inner cities.

Cities expanded outward, thanks to automobiles and mass transit systems.

• America’s wealth during the 20s was poorly distributed.

• Farm income declined during the decade.• Farmers suffered from growing debt and

falling farm prices.