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To what extent was America in the 1920s a land of economic prosperity?

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Introduction

To what extent was America in the 1920s a land of economic prosperity? Few historians can doubt that America was a land of economic prosperity in the 1920s but there is still some controversy to the extent in which such prosperity extended to all sections of American society. Many factors contributed to such prosperity. The economic boom was fuelled by rich natural resources such as oil, coal, iron and gas. The USA also led the world in most areas of industry. It was foremost in developing new technology and its film industry was growing rapidly. America also made money out of the war and its decision to remain neutral was an economic masterstroke since it sold guns and ammunitions to the Allies as well as loaning them money which America got back with favourable interest. ...read more.

Middle

Henry Ford the owner of the Ford car company introduced the production line into car factories. Each car was worked on by many people as it moved along a conveyer belt meaning more cars can be produced in a shorter time. This meant that the price of cars fell meaning more people bought them. In 1919 9million Americans had cars and by 1929 this figure had grown to 26 million. The multiplier effect on other industries was considerable and in many ways the automobile industry serviced the whole economy. Other new industries grew in this time. Most were electrical goods like the washing machine and the Hoover. Hire purchase meaning people could buy more goods and pay for them over a long period of time. ...read more.

Conclusion

Not all American people shared in the boom either. The black community and immigrants suffered prejudice, poor employment opportunities, and a lack of formal education and health problems. Their wages were often pitifully low and certainly did not increase at the scale of company profits. Indeed, the image of prosperity in America was in many ways just a fa�ade as many Americans still suffered abject poverty and limited opportunities. Statistically, 10% of American income in 1925 went to the poorest 42% of people and conversely 32% of the income went to the richest 5% of the people. So the rich were getting richer and the poor were getting poorer. So the divide grew as some groups benefited more than others. Clearly, the economy was based on a consumer boom in which many Americans were in fact excluded. The basis was created for a great collapse. Marc Cotterill ...read more.

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