10/10/2014
A Booming Economy
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Quick Overview
• The 1920s were an age of dramatic social and political
change. For the first time, more Americans lived in cities
than on farms. The nation’s total wealth more than doubled
between 1920 and 1929, and this economic growth swept
many Americans into an affluent but unfamiliar “consumer
society.” People from coast to coast bought the same
goods (thanks to nationwide advertising and the spread of
chain stores), listened to the same music, did the same
dances and even used the same slang! Many Americans
were uncomfortable with this new, urban, sometimes racy
“mass culture”; in fact, for many–even most–people in the
United States, the 1920s brought more conflict than
celebration. However, for a small handful of young people
in the nation’s big cities, the 1920s were roaring indeed.
Ch. 24: The New Era,
1920-1929
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Consumerism flourish (Table 24.1)
GNP grow 40% (1919-1929)
US government foster business growth
Entertainment = big business
Technology, middle class expand
New attitudes and uses of time
Some oppose changes (reactionary)
Decade end with economic collapse
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Fig. 24-CO, p. 650
I. New Economic Expansion
• Decline, 1920–21 (drop in war production)
• Electricity spur:
– recovery, then growth (1922–29)
– new goods for factory and home
• Installment plans stimulate consumption
• Business consolidation continue:
– oligopolies control production and
– marketing, distribution, finance
– US Steel, General Electric
II. “New Lobbying”
• Business and professional organizations =
special-interest groups
• US government:
– cut taxes on wealthy/corporations
– raise tariffs
– ease regulation
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III. Labor Unions;
Farmers
• USG, states, corporations: all anti-union
• Supreme Court:
– void minimum-wage laws
– void child labor restrictions
– restrict strikes
• Farmers suffer debt because of:
– falling prices
– overproduction
– foreign competition
VI. Consumer Society
• For many, purchasing power increase:
– earnings increase
– cost of living stable
• 1929: electricity in ⅔ of all homes
• Automobiles:
– 1929: 20% of Americans own one
– some workers purchase
– alter life
– growth of oil industry
• USG build network of roads/highways
The Automobile Drives Prosperity
• The Post-WWI recession
ended quickly.
• Stock Prices rose quicklyfactories were producing
more goods.
• Wages were on the risepeople bought more items
• Henry Ford introduced
methods and ideas that
changed production,
wages, and working
conditions , and daily life.
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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.
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The Automobile Changes America
• The automotive industry created a boom in
related industries. (steel, glass, rubber,
asphalt, wood, gas, insurance,
construction, etc.)
• 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).
• 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.
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• 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.
VII. Advertising;
Radio
• Businesses spend heavily, use:
– psychology
– celebrities
• Radio = key medium:
– USG reject funding
– programming stress entertainment
– 1924 candidates use radio
• Urban workers:
– gain access to plumbing, electricity
– use credit to buy new goods
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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
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• Installment plans became a way for
everyone to afford the new products.
• People now were buying products that
otherwise they could not afford.
What does it mean to be
American?
Advertising in the Jazz Age
Another ad legitimizing desire; it associates the product with glamour and modernity
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“Kiss Me with your Barbasol Face”
Forever Young
Americans and their waists…
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Mobile Advertising…
Buy Now Pay Later!
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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.
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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
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• America’s wealth during the 20s was
poorly distributed.
• Farm income declined during the decade.
• Farmers suffered from growing debt and
falling farm prices.
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