The USA, 1918-41
1 The Roaring Twenties
The economic benefits of the First World War
● A
lthough USA only joined WW1 in 1917, they were involved in selling food and
weapons to Allied countries
Industry:
F
● actory production grew by 35%
● In 1990, 26.1 million tonnes of steel was produced
● This increased to 42.1 million tonnes in 1920
Agriculture:
P
● roduction on US farms grew rapidly during WW1
● There was a huge global demand for agricultural goods, including wheat (for
food production) and cotton (for clothing)
● America supplied 30% of the world’s wheat supply and 55% of their cotton
● This changed farmers lives in the following ways:
○ Prices for goods rose by 25% during the war
○ Average income of a farmer who owned their farm increased by
approximately 30%
○ Farmers began to use machines on their farms, causing tractor sales to
increase dramatically
○ More farmers took out loans in order to expand their farms to increase
production of wheat to sell aboard
Workers:
T
● he war had many positive impacts on American workers
● The increase in demand for agricultural and industrial goods meant more
workers were needed
● Employment rates increased by 1.3 million
● Wages of unskilled workers rose by 20% during the war
● Many women joined the workforce to replace men
Limitations:
● G overnment contracts were cancelled and European farming had recovered by
1920
● This caused demand for agricultural and industrial goods to decrease
Page109
, ● R eturning soldiers re-entered the workforce, causing new workers (mainly
women) to lose their wartime jobs
● The increase in black workers in industrial cities caused race riots, which
continued after the war
● Farmers who had borrowed money to expand production struggled to pay back,
since European demand dropped
Reasons for economic boom in the 1920s
● I n 1922, America experienced an economic boom, which lasted until autumn
1929
● Between 1919-29, industrial productivity increased by 72%
● Unemployment never rose above 3.7% until 1929
Henry Ford and mass production:
● H enry ford introduced new methods of mass production, involving a conveyor
belt and the assembly line
● The time taken to assemble Ford’s Model T car was reduced from 12-13 hours to
1 hour 33 minutes
● Mass production methods allowed the cost to fall, in 1914 it was $850 and in 1926
costed $295
● Mass production was the idea that workers lined up along a conveyor belt, and
each worker would each do a single job
● On an efficient day, a Model T car was produced every 10s
● By 1925, half the world’s cards were Model T’s
Hire purchase:
● H ire purchase was the idea that the customer hired the product from the
business and pay for it in instalments
● It helped the economy because it encouraged people to keep buying
● In 1929, 75% of cars and 50% of electrical devices were bought using hire
purchase
● This increased demand, giving factories a reason to produce
Advertising:
I n the 1920s, advertising became a big business
●
● Kellogg’s Corn Flakes used big posters and colour pages in newspapers and
magazines to encourage people to buy their products
● Listerine created a new market for their goods by popularising the term
‘halitosis’ for bad breath
● Radio also played a role in the development of advertising
Page110
, B
● y 1929, there were 618 radio stations, most carrying adverts
● By 1929, $2 billion a year was spent on advertising and 600,000 people were
employed in the industry
Consumerism:
● C ompanies would actively encourage consumerism and create a consumer
society in which buying a variety of branded goods was important to ordinary
people
● Consumerism was the idea of spending money on items which were not
essential; the preoccupation with acquiring consumer goods
● By 1929, there were 1,395 department stores
● In 1921, 5,000 refrigerators were sold, this increased to 1 million by 1929
● $850 million per year was spent on home entertainment radio equipment
Popularity of the stock market:
● B etween 1927-29, 1.5 million Americans became involved in buying shares in the
American stock market in Wall Street
● People bought shares in businesses because as industries made more money,
the shares became worth more, so then they could sell their shares and make a
profit
● This process was known as ‘speculating’ on the stock market
● There was also ‘buying on the margin’ where you would borrow money to buy
shares, selling them when they make a profit, repaying the loan and keeping the
rest of the money
● These practices turned ordinary people into shareholders
● They would do this in the hope that the value of the share would rise in value and
could be sold for a profit
● It also led to more companies selling shares, which gave them the money they
needed to develop their businesses
● In 1925, there were around 500,000 shares available to buy, but by 1929 this
increased to 1,127,000 available
Problems in farming, including over-production and mechanisation
● heat went from a high point of $2.50 per bushel to less than $1 per bushel
W
● Cotton prices fell by two-thirds
● In 1924, around 600,000 people lost their farms
● Prohibition significantly reduced the demand for wheat
● The emergency tariff act of 1921 meant Americans bought home-produced
goods, but other countries placed similar tariffs on their imports, making
American goods harder to sell outside the country
Page111
, ● M echanisation involved the replacement of horses with tractors, meaning
farmers would need fuel to run their farm
● The government encouraged farmers to modernise their methods using
machines, resulting in overproduction as farmers produced more than they could
sell
● Total farm income fell from $32 billion in 1919 to $13 billion in 1928
The decline of older industries
● As new industries boomed, older ones started to decline
Coal mining industry:
F
● aced increased competition from oil, gas and electricity
● In 1920, 568 million tonnes of coal had been mined, but this fell to 518 million
tonnes in 1930
● By 1929, 550,000 homes were being heated by oil
● There was a falling demand from the railroad industry
● Mechanisation led to the loss of jobs in mining
● There was an increase in strikes within the industry
Textiles factory:
● aced a huge drop in demand due to fashion changes
F
● Faced competition from silk and rayon
● Shorter dresses required fewer cloth to make
● Many textile mills were forced to close down
Railroad industry:
H
● ad grown during world war 1 to transport supplies and troops
● Progress continued slightly in the 1920s as railroad use for transportation of
goods grew at a rate of 10%, but this was nothing compared to before
● The rise in car ownership reduced the number of passengers on trains, as they
would prefer using cars
Effects of the decline:
A
● s the older industries declined, the workers suffered
● Workers would have to leave their homes, find enough money to move to a new
area and continue to support their family, without the guarantee of a new job
● Strikes:
○ They became more violent and their numbers increased
○ In 1929, a police chief was killed breaking up a strike by mill workers in
the South
Page112
1 The Roaring Twenties
The economic benefits of the First World War
● A
lthough USA only joined WW1 in 1917, they were involved in selling food and
weapons to Allied countries
Industry:
F
● actory production grew by 35%
● In 1990, 26.1 million tonnes of steel was produced
● This increased to 42.1 million tonnes in 1920
Agriculture:
P
● roduction on US farms grew rapidly during WW1
● There was a huge global demand for agricultural goods, including wheat (for
food production) and cotton (for clothing)
● America supplied 30% of the world’s wheat supply and 55% of their cotton
● This changed farmers lives in the following ways:
○ Prices for goods rose by 25% during the war
○ Average income of a farmer who owned their farm increased by
approximately 30%
○ Farmers began to use machines on their farms, causing tractor sales to
increase dramatically
○ More farmers took out loans in order to expand their farms to increase
production of wheat to sell aboard
Workers:
T
● he war had many positive impacts on American workers
● The increase in demand for agricultural and industrial goods meant more
workers were needed
● Employment rates increased by 1.3 million
● Wages of unskilled workers rose by 20% during the war
● Many women joined the workforce to replace men
Limitations:
● G overnment contracts were cancelled and European farming had recovered by
1920
● This caused demand for agricultural and industrial goods to decrease
Page109
, ● R eturning soldiers re-entered the workforce, causing new workers (mainly
women) to lose their wartime jobs
● The increase in black workers in industrial cities caused race riots, which
continued after the war
● Farmers who had borrowed money to expand production struggled to pay back,
since European demand dropped
Reasons for economic boom in the 1920s
● I n 1922, America experienced an economic boom, which lasted until autumn
1929
● Between 1919-29, industrial productivity increased by 72%
● Unemployment never rose above 3.7% until 1929
Henry Ford and mass production:
● H enry ford introduced new methods of mass production, involving a conveyor
belt and the assembly line
● The time taken to assemble Ford’s Model T car was reduced from 12-13 hours to
1 hour 33 minutes
● Mass production methods allowed the cost to fall, in 1914 it was $850 and in 1926
costed $295
● Mass production was the idea that workers lined up along a conveyor belt, and
each worker would each do a single job
● On an efficient day, a Model T car was produced every 10s
● By 1925, half the world’s cards were Model T’s
Hire purchase:
● H ire purchase was the idea that the customer hired the product from the
business and pay for it in instalments
● It helped the economy because it encouraged people to keep buying
● In 1929, 75% of cars and 50% of electrical devices were bought using hire
purchase
● This increased demand, giving factories a reason to produce
Advertising:
I n the 1920s, advertising became a big business
●
● Kellogg’s Corn Flakes used big posters and colour pages in newspapers and
magazines to encourage people to buy their products
● Listerine created a new market for their goods by popularising the term
‘halitosis’ for bad breath
● Radio also played a role in the development of advertising
Page110
, B
● y 1929, there were 618 radio stations, most carrying adverts
● By 1929, $2 billion a year was spent on advertising and 600,000 people were
employed in the industry
Consumerism:
● C ompanies would actively encourage consumerism and create a consumer
society in which buying a variety of branded goods was important to ordinary
people
● Consumerism was the idea of spending money on items which were not
essential; the preoccupation with acquiring consumer goods
● By 1929, there were 1,395 department stores
● In 1921, 5,000 refrigerators were sold, this increased to 1 million by 1929
● $850 million per year was spent on home entertainment radio equipment
Popularity of the stock market:
● B etween 1927-29, 1.5 million Americans became involved in buying shares in the
American stock market in Wall Street
● People bought shares in businesses because as industries made more money,
the shares became worth more, so then they could sell their shares and make a
profit
● This process was known as ‘speculating’ on the stock market
● There was also ‘buying on the margin’ where you would borrow money to buy
shares, selling them when they make a profit, repaying the loan and keeping the
rest of the money
● These practices turned ordinary people into shareholders
● They would do this in the hope that the value of the share would rise in value and
could be sold for a profit
● It also led to more companies selling shares, which gave them the money they
needed to develop their businesses
● In 1925, there were around 500,000 shares available to buy, but by 1929 this
increased to 1,127,000 available
Problems in farming, including over-production and mechanisation
● heat went from a high point of $2.50 per bushel to less than $1 per bushel
W
● Cotton prices fell by two-thirds
● In 1924, around 600,000 people lost their farms
● Prohibition significantly reduced the demand for wheat
● The emergency tariff act of 1921 meant Americans bought home-produced
goods, but other countries placed similar tariffs on their imports, making
American goods harder to sell outside the country
Page111
, ● M echanisation involved the replacement of horses with tractors, meaning
farmers would need fuel to run their farm
● The government encouraged farmers to modernise their methods using
machines, resulting in overproduction as farmers produced more than they could
sell
● Total farm income fell from $32 billion in 1919 to $13 billion in 1928
The decline of older industries
● As new industries boomed, older ones started to decline
Coal mining industry:
F
● aced increased competition from oil, gas and electricity
● In 1920, 568 million tonnes of coal had been mined, but this fell to 518 million
tonnes in 1930
● By 1929, 550,000 homes were being heated by oil
● There was a falling demand from the railroad industry
● Mechanisation led to the loss of jobs in mining
● There was an increase in strikes within the industry
Textiles factory:
● aced a huge drop in demand due to fashion changes
F
● Faced competition from silk and rayon
● Shorter dresses required fewer cloth to make
● Many textile mills were forced to close down
Railroad industry:
H
● ad grown during world war 1 to transport supplies and troops
● Progress continued slightly in the 1920s as railroad use for transportation of
goods grew at a rate of 10%, but this was nothing compared to before
● The rise in car ownership reduced the number of passengers on trains, as they
would prefer using cars
Effects of the decline:
A
● s the older industries declined, the workers suffered
● Workers would have to leave their homes, find enough money to move to a new
area and continue to support their family, without the guarantee of a new job
● Strikes:
○ They became more violent and their numbers increased
○ In 1929, a police chief was killed breaking up a strike by mill workers in
the South
Page112
