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Why was there a boom in the 1920's?

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Why was there a boom in the 1920's? In this essay I am going to answer the following statement. 'Without the new automobile industry the prosperity of the 1920's would have scarcely been possible'. Before answering this question I am going have to investigate the factors involved in causing the economy to boom. First I am going to look at why the automobile industry was such an important cause to the American boom. The most important industry in the 1920's was the automobile industry. The motorcar had only been developed in the 1890's. The first cars were built by blacksmiths and skilled craftsmen and they took a long time too make and were very expensive. Car production was revolutionised by Henry Ford. In 1913 he set up the first moving production line in the world, in a giant shed in Detroit. Each worker on the line had one or two small jobs to do as the skeleton of the car moved past him. ...read more.


Finally I am going to look at other factors that were important contribute to the economic boom. The First World War had a very important impact on the American economy. America only joined the First World War in 1917 and so suffered relatively little. However the American economy gained. It got a great boom from selling weapons foodstuffs and machinery to Britain and France. In addition to this they also lent vast amounts of money, which generated lots of interest. The USA also took advantage of the war by stealing markets from countries like the Chemistry market from Germany. The Americans were able to take over the Allies trade during the war, which helped the American boom. Another factor of the boom was the Republican policies. Republicans believed in 'Laissez-Faire'. This means that the government thought that they should interfere as little as possible in the running of the economy. This is where prosperity came from. The government also introduced tariffs on imported goods, they kept taxes low to give the Americans more money and they allowed the development of trusts. ...read more.


The iron industry benefited, Ford would buy iron from them and so they would have to make more iron and so would have to employ more workers. Then more people would earn and so more people would spend hence more money would go into the industry. Other industries like the glass, rubber and petrol industry also benefited, as they were needed to make cars. The cars also meant people could live on the edge of the suburbs so it created jobs for builders etc. People were a lot happier with the cars. I disagree with the statement as I think that all the other things that happed in the 1920's led to prosperity. Even if the automobile company had not thought of mass production on the assembly line another industrial company might have thought of it instead. I think that the First World War really got the American economy. I think that the Americans would have found another way to reach prosperity. Overall I think that the automobile industry contributed greatly to the boom and the people's prosperity in the 1920's. But I think it was all the reasons together that made prosperity in the 1920's. ...read more.

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