why was there an economic boom in the 1920's
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Introduction
Why was there an economic boom in the 1920s? Why was there an economic boom in the 1920s? There was an economic boom in the 1920s for 5 main reasons. Firstly the growing strength of American Industry meant that the USA was a leading producer of many raw materials. This was partly due to the second main cause of the boom, which was World War 1. This had helped the American Industry to grow, as during World War 1 new markets had opened up to America. Also, after World War 1, America took over as a leading producer as many European industries had suffered greatly because of the war. Government policies meant that businesses could thrive without government interference. World War 1 led to new markets being opened to America. This resulted in America developing new industries and new industrial ideas. These new industries meant that Americans believed that America was the most powerful country in the world. There was also other little factors that led to the boom and helped it become self- generating, these are mass- production, mass- marketing and credit. ...read more.
Middle
The American government at the time also helped the progression of industries. At the time all US presidents were republican and the republicans had dominated congress. They worked by the policy of "laissez- faire" (leave alone) approach to businesses, trying to interfere as little as possible. They believed prosperity came from this idea. The republican Warren Harding won the election of 1920 promising a return to normalcy (isolationism). He introduced tariffs to make it expensive to buy foreign goods, encouraging Americans to buy US goods and pour money back into the economy. This protected US businesses and allowed them to grow rapidly. The republicans also kept taxes low as they thought that this would lead to more money being spent e.g. on consumer goods, the republicans believed that this would help the economy grow. Despite Harding being exposed as a corrupt man, his policies helped the progression of the economy and were adopted by the next president, Calvin Coolidge, who was also republican and believed the same policies as Harding but used different styles. He used the ideas of trusts, large companies were allowed to control whole industries e.g. ...read more.
Conclusion
Another of the little causes was mass- marketing; this enabled the mass- production products to be sold to a mass- market. So companies spent huge amounts of money on advertising. This new industry developed sophisticated techniques to persuade people to buy. The expansion of mail order companies gave consumers in the countryside access to a wide range of goods on offer. The final small cause was credit; this made it easier for people to buy goods if they did not have cash in hand. Firms allowed customers to pay by installment or hire purchases. Combined with consumer confidence, credit created a great deal of sales. In conclusion there are 5 main reasons why the economic boom of the 1920s happened in USA, these being the growing strength of American industry, the effects of ww1, government policies at the time, American development of new industries and new industrial ideas and finally confidence. There are also smaller causes that sprouted out of these bigger ones, including credit, mass- marketing and mass- production. All of these factors fed into the boom but not just one of them could have started the boom by itself. They were all needed so that once the boom had started it could become self- generating. By Joshua Banks ...read more.
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