Shopping. In the cities, giant chain stores opened to stock the new range of goods available - like Bloomingdales. The number of department stores grew from 312 to 1,395 between 1921 and 1929. It was at this time that clothing for women came to be mass produced as manufacturers realised that a certain size would fit many women. Clothing sales went up 427% in the 1920s. The improvements in the truck and road industry meant that goods could be delivered more easily by mail order. People living in remote, country areas could but anything from farm machinery to frying pans and the number of companies supplying mail order grew enormously. The most famous was Sears, Roebuck and Co of Chicago. In 1928 nearly one-third of Americans bought goods from the company and its sales were worth $347m that year.
The car industry - the Model T Ford (or the ‘Tin Lizzie’). In 1908 Henry Ford, the son of poor European immigrants announced he would ‘build a car for the great multitudes and made a car which was slow, ugly and came only in one colour. But it was also tough and reliable and could travel anywhere. It was also cheap. This used the new techniques - by 1909 127,000 had been sold; by 1919 1,876,000 sold and by 1930 15million. It created demand for goods in other industries too like plastics and petrol, rubber, class and steel. New restaurants and motels and gas stations sprang up all over the USA. New roads and towns were developed. Other car manufacturers also sprang up like General Motors and Chrysler. The gov passed the Federal Highways Act in 1921 which meant it was now responsible for road building, rather than the states. It built 10,000m miles per annum to 1929 which enabled goods to move more easily as well as creating construction jobs. Truck registrations increased from 1m in 1919 to 3.5m in 1929 and 15bn gallons of petrol were used each year by 1929.
The electricity industry - by 1929 most homes in the cities had electricity and nearly 70% of Americans had electric light. Factories were run by it, and a whole range of new goods were produced - cookers, vacuum cleaners, washing machines etc. These new electrical industries used the mass production principle and were sold via credit and hire purchase, and often using the new mediums of advertising. The electric and car industry benefited from new technology, much of which had been developed during the war. Plastics like Bakelite were developed and used in new household products. There were technological developments in many areas - automatic switchboards, conveyor belts and concrete mixers. These helped modernise and create industries.
The construction industry was also in boom, especially building factories and office buildings for banks and insurance companies. People were also employed in building roads and gas stations. It was also the age of the skyscraper - as confidence soared so companies sought to demonstrate their prestige and power by creating ever taller buildings. The increase in wealth also saw more schools, hospitals and other public buildings.
Hours for workers were reduced which had the advantage of boosting leisure industries. For example baseball and boxing. Receipts for the Tunney v Dempsy fight in 1927 were $2,5658,660. Baseball was most popular - Babe Ruth was the most popular star. It was also very profitable. By the 1920s Hollywood was the film making capital of the world and movie-going one of the most popular pursuits. In 1920 around 40m tickets were sold a week - by 1930 it was 100m. It became a mass production industry with three films being finished each week. Many had a standard formula and talkies arrived too. The stars became idols and encouraged spin offs like magazines etc.
Source 1
HENRY FORD AND THE FORD MOTOR COMPANY OF DETROIT
Early developments.
Of all those associated with the American boom years, Henry Ford is perhaps the best known. He was born into a farming family in Dearborn, Michigan in 1863 and, after education in local schools, became a machinist’s apprentice in Detroit at the age of 16. From 1888 to 1899, he was a mechanical engineer, rising to become chief engineer with the Edison Illuminating Company. But his main interest was in developing the automobile and, as early as 1893, after many experiments, he completed the construction of his first car.
The beginnings of mass production. In 1903, he founded the Ford Motor Company in Detroit, which, by 1908, was producing a hundred cars a day at its Highland Park factory. This output was achieved by simple mass production methods. These were already established in some industries, for example, in the manufacture of firearms, sewing machines and railway engines. They were later extended to the production of clocks, typewriters and bicycles.
In variably, this form of production was achieved by the trolley system in which interchangeable parts were moved around the factory to the place where the product was actually being made. Such methods demanded less skill of the workers involved and tended to produce a semi-skilled workforce who were not eligible for membership of craft trade unions.
Assembly-line production. By 1913, the Ford Motor Company was producing 500 cars a day although it still took 12½ hours to produce each car. For about six years, Ford had been planning a light, cheap car for the mass market but was searching for a far more efficient method of production. The answer was the assembly line. He had got the idea from methods used in slaughterhouses in Chicago and adapted them to speed up the mass production methods already in use in his factory. This was the real breakthrough to cheaper mass production. As the chassis of the car moved through the factory on a conveyor belt, the workers had to perform set tasks, adding parts to the chassis before it passed on to another stage of assembly. The most important skill was speed, as the tasks themselves became simple and repetitive. The result was the cheap Model T Ford or ‘Tin Lizzie’ as it came to be known.
When the assembly line was introduced, it reduced the production time of a car from 12½ hours to 1½ hours. All Ford cars were now standard, basic models that could be produced quickly and cheaply. Consequently, higher production targets could be set. By developing the principle of the division of labour and by making machinery and equipment more specialised, assembly-line systems could be further developed. As skilled workers were now being replaced by machines, stronger and faster machine tools were developed with sub-assembly lines feeding the main assembly lines. These developments led to the birth of large new industrial complexes.
As a result of these revolutionary techniques, the Ford Company was able to produce 1 million Model Ts each year in the 1 920s and at a much lower cost to the consumer. In 1914, a Model T cost $850; by 1926, the price had dropped to $295. This, together with the availability of cheap credit, explains why the number of cars on the road in America rose from 8 million in 1920 to 23 million by 1930. By 1925, half the world’s cars were Model Ts. In the late 1920s, Ford plants had been established in Asia, Australia, Canada, South Africa and South America. So effective were his new techniques that they were adopted by Citro~n and Renault in France, by Agnellini (Fiat) in Italy and by Morris and Austin in Britain. Techniques of mass production were also sufficiently adaptable to be transferred to the production of radios, refrigerators and vacuum cleaners. This was the basis for the consumer boom of the 1 920s.
The experience of Ford’s employees
Whilst Ford, his shareholders and associates were delighted with the progress made and the profits that followed, his workers were less happy. As early as 1914, the unpleasant monotony of assembly-line work and repeated increases in production quotas led to a monthly labour turnover at Highland Park of between 40 and 60 per cent.
In 1914, Ford introduced a number of changes to counteract the discontent of his workers and the rapid labour turnover.
∙ He reduced the length of the working day to 8 hours and introduced a third shift. This increased the demand for workers who often came from immigrant communities.
∙ He doubled the daily wage to $5 and introduced a scheme of profit-sharing.
- These changes resulted in the increased stability of his workforce.
- These factors, together with the enormous growth in output, led to an increase in company profits from $30 million in 1914 to $60 million in 1916.
In 1927, work was completed on a new Ford factory on The River Rouge plant was the biggest factory complex in the world, employing around 80,000 workers. It contained all that was needed for car production: a foundry to make steel for car bodies, an electricity generating plant, a glass works, a railway and a port. Most significantly of all, it was to be the site for the manufacture of a new Ford car, the Model A. This was intended to replace the Model T, which had achieved sales figures of 15 million but was now to be discontinued.
Whilst Ford paid his workers relatively well, they were tightly disciplined and their work was closely supervised. Within his factories, Ford’s Protection Department employed strong-armed security men who watched over union organisers, intimidating and assaulting them. It was not until 1941 that any labour union was recognised by the Ford Company to represent employees in bargaining for wages. Clearly, Henry Ford took a paternalistic approach — he was a ‘father figure’ who knew what was best for his workers. Consequently, in his view, there was no need for unions in any of his plants.
WHAT WAS THE IMPACT OF THE MOTOR CAR INDUSTRY ON THE US ECONOMY IN THE 1920S?
By 1930, the car industry was contributing 13 per cent of US manufacturing production and employed 4 million workers. But the industry had a much wider economic impact as it stimulated the growth of other industries that served it. By the mid 1920s, the car industry was using:
- 96 per cent of the nation’s oil
- 75 per cent of the nation’s plate glass
- 65% of the nation’s leather
- 80% of the nation’s rubber
- 20% of the nation’s steel
It also led to increased road construction, more fuel stations, hotels and restaurants as the nation became more mobile. Thus with 23 million cars on the roads by 1929, the motor industry had an enormous impact of the economy as a whole.
Those who lost out
America in the 1920s was, for some, a land of great opportunity and wealth. People talked of ‘America the Golden’ and the ‘land of unlimited possibilities’. But millions of Americans did not live in this comfortable world. The Model T cost $3-400 but this was well beyond the reach of most families, as was the radio and mass-produced household gadgets.
Because life during the economic boom was so exciting for some people, it is easy to imagine that all Americans shared in the wealth that was created. However, America was a divided society. There were a very few rich people at the tops of the society and many better-off Americans in the middle, but a large number lived in poverty at the ‘bottom of the heap’.
The new industries made great profits, but there is little evidence that this wealth was shared out equally. The Brookings Survey of 1929 found that 18 million people lived in real poverty, and that 78% of the profits from industry went to just 0.3% of the population. By 1929, the average hourly rate of most production workers had risen by only 8% since 1921. Six million people had an income of less than $2,000pa - the minimum considered necessary for survival.
Declining industries
Although some workers in new industries did well, other found their industries in decline. In the textile and clothing industries, for example, new synthetic fibres like rayon wee introduced and became very popular. They were produced in new, efficient factories that needed fewer workers. The old textile industries like cotton declined.
Coal was another industry in decline - too much coal was being produced and the market was shrinking as oil, gas and electricity were increasingly used as alternatives. Mines closed and wages were cut. Safety standards dropped and the working day grew longer. In 1922 600,000 miners went on strike for better conditions to no avail. The unions were broken too.
Blacks
Blacks did badly as always. They were 10% of the population of the USA and 85% still lived in the south where they were either labourers to sharecroppers (who worked for a share of the crops). Three quarters of a million black farm workers lost their jobs during the 1920s. It was commented during the depression that ‘the reason why the Depression didn’t have the impact on the negro that it had on the whites was that the Negroes had been in the Depression all the time’. In the south Jim Crow laws and lynching were common.
Many journeyed north to find work during the First World War - but in the northern city of Milwaukee 60% of black women worked as low paid domestic servants in white households. Car factories would only hire blacks in small numbers and some had white only policies. In Harlem death rates were 42% higher than in other parts of New York due to high incidences of childbirth and infant mortality, TB, pneumonia and heart disease aggravated by the lack of medical care.
New immigrants
New immigrants also faced discrimination. A large number worked in construction where there was a building boom, but the steady supply of cheap immigrant labour meant that wages were kept low. The unemployment rate amongst new immigrants remained high throughout the decade. In 1921 an Immigration Quota Act was passed and in 1924 a National Origins Act reduced the quota for newer types of immigrants, eg those from eastern Europe.
American Indians
American Indians fared no better. Although a 1924 act declared them to be full citizens of the USA the white authorities tried to destroy the Indian culture and way of life. Indian children were forced to go to boarding schools and children from the same tribe were kept apart to destroy tribal identity. Children found speaking their native language were beaten. They certainly were not allowed to share in the new wealth.
Farmers and farm workers
Despite the growth in industry, America was still mostly agricultural. Farmers also did badly because during the war demands for food had soared and farmers had borrowed heavily from the banks to buy new land and machinery. When the war ended the new production was not necessary, and a food surplus in the 1920s meant prices fell and thousands of farmers, already heavily in debt, borrowed more to keep themselves afloat. A fall in population made matters worse. From 1921 to 1929, the borrowed around £2,000m. Rents and mortgages increased by over 30%, so more and more farmers went out of business. Some were evicted whilst others sold their land to clear debts. Between 1920 and 1930 the number of farms declined for the first time in US history. 66% of farmers operated at a loss.
There were other factors working against the farmers too. Prohibition cut the demand for grain. Synthetic fibres like rayon were produced by big textile companies which meant less demand for cotton. Technology also affected smaller farmers who could not compete against larger farmers who used technology and machinery to cut costs. The boom in the motor car trade affected farmers because there was less demand for horse fodder. Canada was proving highly competitive regarding grain which caused the price to collapse on the world market - more than 3m farmers were earning less than $1,000 a year. By 1924, 600,000 were bankrupt and over 1 million farm workers had left the land. Many ended up as tramps in the cities. They protested against their situation, trying the persuade the government to raise prices. It has been estimated that around 72% of samiles in 1924 had lost time through unemployment and 43% had been unemployed for over one month.
After the War, America became isolationist and as part of this policy it raised tariffs stopping foreign countries exporting manufactured goods to the US. As a result they had fewer US dollars with which to buy American wheat and cotton. European countries found that they could buy cheaper food from Canada, Russia and Argentina. Tastes changed too - more people consumed fruit and vegetables and milk, and less meat, making things worse for cattle farmers.
Big mechanised farms did well, the mid-western grain growers and California and Florida fruit growers made a good living too.
IN 1927 the McNary-Haughen bill was introduced in Congress to purchase surplus agricultural produce at a guaranteed price and sell it on the world market. It was vetoed. When the crash hit in 1929 a Federal Farm Board offered loans to farmer’s cooperatives but it was already too late.
Farm prices in the 1920s:
Farm income in South Carolina in 1929 was around $129pa, and in the towns in South Carolina workers could expect to earn $412pa. This vast difference in wealth was to have serious long-term implications for the economy.
The Republican government was reluctant to interfere in the free market, but did make some concessions to help the farmers:
- easier for farmers to borrow money
- tariffs increased against foreign imports five times between 1920 and 1930
- research commissioned into the cause of pests and droughts.
Most of these actions made little difference.
Conclusion on the 1920s
Historical interpretations of the 1920s have depended greatly on the perspective from which the period has been viewed. Historians writing in the period of the Depression, for example, were clearly informed by a larger source of evidence and influenced by the mood of the time which laid the blame for the Depression on the Crash and the speculation and economic expansion that preceded it. By this time, business as the creator of wealth and prosperity was in disrepute and businessmen were perceived as the villains of the piece.
From the more enlightened position of the era of the New Deal, the decade is judged to be reactionary, dominated by selfish and greedy businessmen. During the 1930s, historians of the period were in possession of evidence that highlighted the corrupting influence of the materialism that prosperity engendered. Marxist historians such as Lewis Corey and John Chamberlain condemned the twenties as the triumph of ‘monopolistic capitalism’. It was also seen as a reactionary period, a time of prejudice and bigotry characterised by the racist activities of the Ku Klux Klan, discrimination against immigrants that destroyed the ‘American Dream’ for thousands.
On the other hand, in the late 1940s, in the aftermath of the Second World War, the decade was seen more positively as the period when the wealth that enabled the USA to support the Allied cause was created. Historian Bernard De Voto contradicted earlier interpretations by claiming that the twenties were not negative or irresponsible, but were made to look that way by the literary figures of the day. George Soule, an economic historian, claimed in 1947 that in the twenties the rich were getting richer and that the poor also were getting richer, but at a much slower rate.
Few historians in the 1 920s, however, would disagree with the view that the United States enjoyed unrivalled economic prosperity in the 1920s and they praised the businessmen whom they considered had created it. Amongst Americans living at the time, there was a widely held belief that economic progress was unstoppable. Charles and Mary Beard, for example, in The Rise of American Civilization (1927) attributed prosperity to the rapid growth of industry and mechanisation. This, in the context of laissez-faire politics, produced the spirit of optimism and confidence that made investment and even greater prosperity possible. Following the end of the First World War, America was being transformed into an increasingly industrial and urban society.
Lewis Mumford saw the development of the modern American city as a symbol of the material success enjoyed by the nation. But he also recognised that it represented the spiritual poverty of its inhabitants. This was the theme of the work of Harold Stearns in his book Civilization in the United States (1922). He complained bitterly about the superficial quality of modern American life as it became increasingly materialistic. Whilst these two writers, in particular, were powerful critics of American society at this time, they were a small minority confined to the literary classes. Their views were certainly not typical of the vast majority of Americans, who were more than happy to share the benefits of levels of prosperity previously unheard of. New techniques of industrial production, like those introduced by Henry Ford, would lead, they believed, to the final elimination of poverty.
Americans, who had lived through the idealism of the Progressive Era and the First World War, saw the 1920s, not as an aberration, but as a return to ‘normalcy’. They were overwhelmingly confident in the idea of unlimited progress and prosperity, so much so that they became dismissive of the persistence of poverty amongst significant sections of the population. This has been recognised and considered in the work of recent historians of this period such as Hugh Borgan, Paul Johnson and Maldwyn Jones, who recognise the prosperity and vibrancy of the time but also its inherent weaknesses. These include the stance of the Republican administrations that encouraged unfettered economic development, protected it with short-sighted fiscal policies and followed reactionary or naively insensitive policies that failed to respond to the needs of all Americans.