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. At the begging of the line, a skeleton car went in at the end of the line was a new car. The most famous car was the T-model. More than 15 million were produced between 1908 and 1925 and in1927 they came off the production line at a rate of one every ten seconds.
By the end of the 1920s the motor industry was America's biggest industry. As well as employing hundreds of thousands of workers directly it also kept workers in other industries in employment. It stimulated industries such as Glass, leather, Steel and Rubber which were all needed to build the new vehicles. Petrol was also needed to run the cars and labourers were busy building roads for them to drive on. This was all because of Henry Ford's Motor-car Production line.
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I am now going to look at other industries that were important in the 1920’s.
Through he 1920’s new industries and new methods of production developed in America. America was able to exploit its vast resources of raw materials to produce steel, chemicals, glass and machinery. These products became the foundation of an enormous boom in consumer goods. Telephones, radios, vacuum cleaners and washing machines were mass-produced on a vast scale making them cheaper so that more people could buy them.
At the same time, the big industries used sophisticated sales and marketing techniques to get people to buy their goods. Many advertisements were used to sell consumer goods. Poster advertisement, radio advertisements and travelling salesmen encouraged Americans to spend. Now even if people did not have the money they could borrow it easily. Or they could take advantage of the new ‘buy now pay later schemes.
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. Trusts meant that one person could have complete control over a section of business like steel or coal.
State of mind was another important factor. Up to the 1920s thrift had been seen as a good quality. In the 1920 this was replaced by the belief that spending money was a better quality. Many Americans came to believe that they had a right to prosperity, for most this meant having a nice home, good job and the latest consumer goods.
The given question states, "Without the new automobile industry the prosperity of the 1920’s would scarcely have been possible".
I both disagree and agree with this statement. Firstly I agree because without the Automobile industry the assembly line or method of mass production may have never been produced. The main aspect of the economic boom of the 1920's was the new assembly line production method. This developed industries because with the assembly line it was easier to produce things, or to have them mass-produced. This was cheaper and more effective. In the automobile industry Fords investment in his assembly lines meant that he could lower prices of his cars but increase the wages of his workers. Also when making cars by mass production a lot of workers were required, this meant mean there was a lot of jobs available and more people were earning money and less people were unemployed. The people earning the money could then buy goods such as the cars and so companies would make more profit and so it would help the boom. Because the Ford Company was making, the industries from which they bought the materials to make the cars would also benefit. 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.