The republican government believed that the government should have little interference in the lives of American people which became known as Laissez-faire. In their view, they thought that the president, in this case Calvin Coolidge to leave businesses alone and allow them to do what they wanted. However, Coolidge stated that “The chief business of the American people is business” suggesting that he also followed the Laissez-faire attitude and thought that businesses should be left alone leading to there being no checks on businesses so they could do what they wanted without restriction. The risk to this attitude was overproduction which would consequently lead to the boom to happen. The policies of the republican government included keeping tax at low level as they believed the consumers needed to keep their money and buy goods so demand would increase as they knew this would aid the economy. In addition to this, the government had protected the American industry by placing high tariffs on foreign goods which were being imported into the USA. This allowed foreign products to be more expensive to buy than products that were available within America. This was driven by the Fordney-McCumber tariff which made imported foods highly expensive. The policies of the republican government suggested that due to the government’s policies, a vast boost had taken place in the US economic boom rather than the motor manufacturing industry as the various policies introduced enabled American people to buy more products from America and therefore the demand was increasing causing more money being driven into the economy allowing an economic boom in the 1920s.
The establishment of easy credit enabled American people the availability to borrow money from banks to pay for goods that they could not afford otherwise. In 1929, $7 billion goods had been sold on credit 75% of which were cars. Borrowing money from the banks meant that people were taking on debts which the bankers knew people would not be able to repay however they still had confidence that by doing this it would allow an economic boom to take place. Easy credit need to be accessible for people so they could borrow money and buy goods such as Ford’s cars so therefore this indicates that easy credit was more responsible than the motor manufacturing industry in assisting with the US economic boom in the 1920s as without easy credit, very few people would have been able to buy Ford’s cars.
Finally, the motor industry was introduced by Henry Ford where he produced Model T cars which initially took 14 hours but eventually decreased to 1 hour 33 minutes causing the cost to drop in 1927 to $295. In order to speed up the production process, he pioneered the assembly line in 1913 and conveyor belt methods. This allowed Model T cars to be produced every 10 seconds in 1927 showing that his cars were being built more quickly. Through the production of Model T cars, it enabled the stimulation of other industries for example rubber, steel and glass where material was supplied from. Ford’s River Rouge Plant in Detroit employed around 60,000 workers who had individual tasks in the production of the car. Ford paid his workers well which meant that more people had wages which they could spend on buying expensive goods helping to escalate the money into the economy. Consequently, the motor manufacturing industry proves that through Ford’s business, he was able to support in the economic boom as he employed many people as well as stimulated other industries through the production of his cars.
In conclusion, I believe that the motor manufacturing industry partly had some responsibility in causing the US economic boom as it stimulated other industries allowing economic development and therefore more money into the economy. However, I believe that the most important factor in allowing the boom was confidence as without people having confidence in themselves, their businesses and the consumers, there would not have been policies brought in, easy credit where bankers would be able to trust the consumers and allow them to borrow money in order to buy expensive goods such as cars.