How far did the US economy boom in the 1920s? | History for GCSE/IGCSE - Year 11 PDF Download

What Factors was the Economic Boom based on?

• Economic boom: A period of time when the economy improves quickly, people earn more, and the standard of living goes up

 First World War 

• During the First World War, America's limited involvement allowed it to maintain its workforce and troops without suffering physical damage on its land.
• America experienced economic prosperity by selling weapons, food, and ammunition during the war.
• Various industries flourished due to high production demands and export rates: 
  • Iron ore production saw a remarkable increase, nearly doubling in just three years
  • The coal, petrol, and wheat industries experienced a significant boom between 1914 and 1917
  • Coal production surged from 422 to 551 million tons during this period
  • The income generated from chemical exports skyrocketed by over 1000%
  • Revenues from wheat, iron, and steel more than doubled in this time frame
• Repayment of loans provided to Britain for reparations

Assembly Line Revolution

• The assembly line concept was pioneered by Henry Ford, introducing a revolutionary method enabling mass production at affordable rates
• Initially confined to the automobile sector, this innovation quickly spread to other industries such as radios and refrigerators
  • The Model T, the first mass-produced car, was priced at a mere $295 by 1928, with a production rate of one car every 10 seconds
• The affordability and consistency in production quality attracted a surge of customers, leading to increased demand, amplified production, and enhanced profitability

Expansion of the Automobile Industry

• Introduction of the assembly line led to further expansion in the automobile industry.
• Cars transitioned from being a luxury to a necessity, driving an increase in production.
• Increased demand for cars stimulated growth in related industries like petrol and glass.
  • By 1925, cars consumed a significant portion of resources: 90% of petrol, 80% of rubber, and 75% of plate glass.
• This expansion created a ripple effect, boosting profits across multiple industries.

Development of Electricity

• Electricity emerged as a cost-effective power source.
• From 1920 to 1929, the percentage of households with electricity rose from 35% to 68%.
• Although prices decreased, the surge in demand resulted in substantial profits.

Technological Developments

• Advancements in technology revolutionized various sectors.
• Radio broadcasting became a popular means of communication and entertainment.
• Improved transportation systems, like the railway network, facilitated easier travel and trade.
• The development of telecommunication systems enhanced global connectivity.
• Appliances like refrigerators, radios, and washing machines became common in households.
• Thanks to the assembly line, mass production was able to satisfy high demand.
• Electricity was able to cheaply power these appliances as well as the factories that produced them.
• In the 1920s, average annual sales grew to over $7 billion.

Entertainment

• Newspapers and magazines saw a significant increase in circulation.
  • The first tabloid newspaper was published in 1919.
  • Topics like sports, fashion, and cinema became popular, leading to more articles on these subjects.
  • By 1922, some magazines had a circulation of over 2.5 million people.
  • Journalism expanded as both a profession and a field of employment.
• The sports industry grew as a source of entertainment.
  • Thousands of people attended sports matches in person and listened to them live.
  • With the advent of radios, live broadcasts of sports matches also became popular.
  • Baseball emerged as the most popular sport and became a highly profitable industry.
  • Millions of dollars were generated from match ticket sales.
• Cinema's popularity surged.
  • Hollywood became the global film capital.
  • Going to the cinema became one of the most common leisure activities.
  • In 1920, 40 million tickets were sold weekly; this number more than doubled by 1930.
  • Film production became a mass industry, with three movies produced weekly in Hollywood.
  • Studios produced million-dollar movies and signed contracts worth thousands of dollars.
  • Film-related content became popular in media, boosting the circulation of tabloids and magazines.

Advertisement

• Entertainment, technology, and various mass-produced goods were prominently marketed.
• Colorful and oversized billboards, alongside catchy slogans, became prevalent.
• Radio advertising emerged as a novel and successful promotional avenue.
• Advertisements permeated newspapers, magazines, and even printed cartoons.
• By emphasizing affordability, ads enticed consumers to purchase non-essential items.
• The advertising boom significantly bolstered sales and profits across multiple industries.

Why did some industries prosper while others did not?

• Industries that thrived encompassed technology, advertising, entertainment, metals, and automobiles.
• Technological advancements, such as mechanization, significantly streamlined mass production processes in these sectors.
• Innovation and widespread advertising efforts ensured that the products catered to consumer needs, fostering high demand.
• The efficiency of mass production led to lower prices and increased accessibility, resulting in millions of units sold annually.
• Established industries like metal experienced a surge in demand due to the growth of the automobile sector.
• The introduction of assembly line techniques revolutionized the automobile industry, making cars affordable for a broader consumer base.
• Various forms of entertainment, including cinema, media, and sports, became immensely popular, generating significant profits.
• Conversely, industries such as agriculture, coal, textiles, and factory work faced challenges in achieving prosperity.

Unemployment

• After the war, numerous soldiers were left unemployed due to the surplus of workforce.
• While some managed to secure jobs in emerging industries and factories, a significant portion remained jobless.
• With decreasing production rates mirroring the decline in exports, the demand for labor decreased.

Technology

• The advent of new technologies rendered many workers redundant as automation and mass production took over.
• The introduction of assembly lines led to layoffs as productivity increased and labor requirements decreased.

New Materials

• Innovative synthetic materials such as nylon and rayon gained popularity due to their cost-effectiveness and durability.
• This shift reduced the reliance on natural materials like cotton and wool.
• While synthetic manufacturing thrived, traditional industries producing natural materials faced crises due to dwindling demand.

Electricity

• The rise of electricity led to a decreased reliance on traditional fuels such as coal. Despite coal continuing to fuel numerous households and industries, electricity emerged as a more cost-effective alternative. Consequently, with the shift towards electricity, the coal industry faced a decline.
• Coal's longstanding role in powering homes and factories was overshadowed by the affordability and efficiency of electricity. This shift in energy sources had significant repercussions, notably impacting America's coal industry.

Why did agriculture not share in the prosperity?

Overproduction

• During World War I, there was a surge in the demand for crops, leading to substantial exports to Europe. However, post-war, Europe became self-sufficient, resulting in a surplus of crops in America.
• Fruit growers, anticipating sustained high demand, shipped large quantities of produce. Nevertheless, as war-recovering economies stabilized, the demand for these goods plummeted.
• The combination of excessive supply and dwindling demand caused a sharp decline in grain prices, illustrating the adverse effects of overproduction on the agricultural sector.

Technology

• Farm laborers were replaced by machinery, leading to their layoffs.
• The agricultural industry underwent mechanization, introducing efficiency through new machinery.
• Despite increased efficiency, overproduction became a significant issue due to low demand.
• Mechanized farms generated profits but still faced losses due to overproduction, impacting small farmers negatively.
• Many small farmers struggled to make a living and some were forced to sell their farms or faced eviction due to low incomes.
• Between 1920 and 1930, there was a notable decline in the number of farms, marking a historical trend.

Synthetic Production

• Rayon emerged as a popular material for clothing production, replacing traditional raw materials like cotton and wool.
• The shift to synthetics had detrimental effects on cotton and wool farmers, with mass-producing factories dominating the industry.
• In certain cotton mills, workers were paid a meager $10 per week, highlighting the challenges faced by laborers in the industry.

Did all Americans benefit from the boom?

Who benefitted from the boom?

• Old Immigrants
  • Old immigrants, many of whom were factory owners with considerable wealth,
  • Engaged in jobs with lower risk of lay-offs.
• Assembly Line Workers
  • Workers in mass production, like automobile assembly, experienced increased wages and demand.
  • These workers were crucial in the booming commercial appliance sector.
• Existing Construction Workers
  • Construction workers, especially those from Asian backgrounds, benefited from the West Coast expansion and increased factory construction.
• Booming Industry Workers
  • Workers in traditional industries such as steel and glass saw a surge in demand due to technological advancements.
  • New industries like synthetic materials flourished due to affordability, durability, and mass appeal.
  • Employees in these sectors experienced improved conditions and demand for their skills.

Why didn’t everyone benefit from the boom?

• Most farmers transitioned to using new machinery for agricultural tasks.
• Overproduction led to a significant decrease in the demand for crops, resulting in a surplus of farmers who lost their livelihoods.
• Canadian farmers posed as competitors in the market, adding to the challenges faced by local farmers.
• Due to financial constraints, farm laborers were laid off as farmers couldn't sustain paying their wages.
• Large farms adopted mechanization, reducing the need for manual labor in crop harvesting.

Black People

• The majority of Black individuals resided in the Southern regions, mainly working as laborers or sharecroppers.
• Approximately 75% of Black farmers lost their agricultural jobs, prompting a significant migration northward in search of better opportunities.
• Despite the move, they faced heightened discrimination in the North.
• Around 60% of Black women were employed as low-paid domestic workers, reflecting gender disparities in the workforce.
• Industries such as car factories exhibited low employment rates for Black individuals, with some establishments being exclusively for white workers.
• Living conditions in Black communities were notably poor, highlighting societal inequalities.

New Immigrants

• A significant wave of immigrants arrived just before or after the war, encountering high unemployment rates due to oversaturation in various industries and a substantial number of jobless troops.
• Many immigrants resorted to accepting any available work, often lacking formal education.
• Construction emerged as a common sector for immigrant employment, characterized by low wages.
• The influx of immigrants led to a surplus of labor, resulting in diminished wages and unfavorable working conditions.

Old Industry Workers

• Technological advancements led to mechanization across industries, leading to layoffs for many workers.
• While certain sectors like steel benefited, the majority of traditional industries faced challenges due to overproduction and declining prices.
• Shrinking markets and evolving consumer preferences contributed to the decline of older industries.
• The shift from traditional raw materials to synthetic alternatives impacted employment in sectors like coal mining.
• In 1922, a significant strike involving 600,000 workers failed to yield desired outcomes, as non-union mines undercut unionized counterparts.

Who were the people of “The Melting Pot?”

Who were the Americans?

• Immigration has transformed America into a diverse society where various cultures coexist.
• By 1920, the United States was home to over 103 distinct nationalities.
• America earned the moniker "the melting pot" as immigrants assimilated, shedding their old identities to embrace American culture.

Old Immigrants

• The initial European settlers predominantly hailed from northern and western Europe, including the British, Germans, and Scandinavians.
• Descendants of these settlers often occupied esteemed positions with better job opportunities, greater wealth, and significant political influence.
• They were commonly referred to as WASPs (White Anglo-Saxon Protestants).

Native Americans

• Indigenous peoples, the original inhabitants of America, faced displacement due to successive waves of immigration from 1850 to 1890.
• Many Native Americans were confined to reservations, preserving their traditional lifestyles and remaining isolated from mainstream society.
• While some maintained their cultural practices, many assimilated into the broader American populace.

Southern and Eastern Europeans

• During the late 19th century, a significant number of Southern and Eastern Europeans migrated to America.
• This group included individuals from Poland, Russia, and Italy, seeking refuge from persecution and poverty in their homelands.
• Many of these immigrants were of Jewish or Catholic descent and often faced discrimination.

Asians

• Asian immigrants, primarily Chinese, Japanese, and Korean, were concentrated on the West Coast of the USA.
• Most Asian immigrants worked as low-income laborers, notably in construction, contributing to the development of West Coast cities and infrastructure.

Hispanics

• Individuals from South America and Mexico sought better opportunities in the United States, sharing the common language of Spanish.
• Many Mexican immigrants, in particular, found work as cowboys on cattle ranches in the Western region of the country.

Why did people want to immigrate to the “Land of Opportunity?”

Pull Factors

• What attracted people to America?
• Space
  • America offered vast open spaces with abundant farm settlements.
  • Cities in America had room for growth and expansion.
• Natural Resources
  • Land in America was affordable and plentiful.
  • America possessed significant reserves of oil, timber, and minerals.
• Economic Opportunities
  • American industry and business were at the forefront globally.
  • The USA underwent rapid industrialization post-1850, fostering a fast-growing economy.
  • There were abundant prospects for establishing new businesses.
• Wages
  • Wages for skilled trades and factory labor were higher in America compared to Europe.
  • During that period, farm workers could afford to purchase land.

Push Factors

• Why did people desire to leave their home countries?
  • Overcrowding
    • Populations were on the rise, leading to a scarcity of land, especially in Europe.
• Lack of Opportunities
  • Europe maintained a society structured by social classes, with the elite controlling land and businesses.
  • Individuals from lower classes faced challenges in improving their circumstances.
• Unemployment
  • Many workers were losing their jobs, with low wages due to a lack of demand.