Economic reasons for prosperity (C)

Detailed

The USA after WWI (3)

Britain spent nearly $47 billion whereas the USA only spent $27 billion

1915 - £500 million loan from private American banks to fund Britain and France (needed repayment)

USA emerged from WWI slowly discovering how powerful they had become

Changes in industry and business techniques (2)

Unemployment never rose above 3.7%

1922 - 29: Production of industrial goods rose by 50%

Mass Production: Context (2)

The second industrial revolution took place in 1850s - USA was relatively newly industrialised

Household items eg. soap and butter went from being homemade to being factory made - factory workers (such as women) had the money to purchase them

Mass Production (2)

All kinds of goods became standarised such as clothing sizes

Labour shortages before and during WWI meant African Americans from southern states were needed to work in the factories of the North, and immigrants from Europe

The Assembly Line (3)

A method of production using a moving conveyer belt

A product is gradually built as it moves along the line

Each person working on the assembly line completes one step of the production

Fords production method (3)

Broke the assembly into 84 steps and trained workers in one area = utilise unskilled workers and reduce price of cars

Hired motion-study expert Frederick Taylor to build machines that could stamp out car parts automatically and introduced the moving assembly line

In 1924, the 10-millionth Model T was manufactured

How many workers did the Ford Motor Company factory in Michigan employ at its peak?

40,000 workers

How did Ford help his workers? (2)

He wasn’t a supporter of Labour Unions, so he paid his workers better wages, gave them Sundays off and gave them better hours

He allowed them to buy the Model T at a reduced cost

Who were the big 3 car firms? (2)

General Motors → Chevrolet, Chrysler → Plymoth and Ford Motor Company

They employed 7.1% of all factory workers and account for 12.7% of revenue

Henry T Ford Impact: Roads (2)

Resulted in a vast national network of roads

During the 1920s, about $1 billion a year was spent on highways

Henry T Ford Impact: Construction industry (2)

Encouraged the construction industry

Petrol stations were built, as were hotels and restaurants

Henry T Ford Impact: Industries (2)

Helped other industries to grow rapidly

Cars used 90% of America's petrol, 80% of the country's rubber and 75% of its glass

Henry T Ford Impact: Social

Henry Ford was so rich and famous that he was able to influence government policy

Management Schools (2)

Business schools grew, with 67,000 students studying business methods by 1928

They hoped to start a career in one of the huge corporations that grew during the 1920s, such as JP Morgan

Advertising (3)

Made huge progress during the 1920s as companies needed to expand demand for their products

They hired psychologists to help target specific groups for their campaigns

Lucky Strike targeted women by marketing their cigarettes as “torches of freedom” encouraging women to smoke in public

Advertising: Endorsements and Revenue (3)

To fuel the boom, consumers needed to keep buying new products

Celebrity endorsements, brand names and slogans all became common advertising techniques to encourage spending

By 1929 $3 billion a year was spent on advertising, 5 times more than in 1914

Technological Advances (3)

The assembly line benefitted many other industries such as clothing and labour-saving devices (vacuum cleaners and washing machines)

However, much of rural America still did not have electricity 

By the end of the 1920s, everyone who could afford electrical goods had bought them - this led to problems of overproduction

Hire Purchase (3)

By 1929, almost $7 billion worth of goods were sold using credit including 75% of cars and 50% of major household appliances

Many people purchased multiple consumer goods on hire purchase, often spending between ¼ and ½ their monthly wages on them, such as cars

Banks lent money very easily with few financial checks

Middle Class benefits: Work (2)

Higher wages: 2 - 3 times more than European wages on average

More time: Working hours reduced to 44 hours a week on average

Middle class benefits: Car ownership/mobility (3)

Automobile ownership meant people could go on holiday

By 1923 there were 2,000 new campsites across America and over 1 million Americans used them

Tourist courts were set up with holiday homes to rent

Middle class benefits: Leisure

Between 1923 and 1930, 60% of American families purchased radios - 50 million tuned in to listen to a boxing match between Tunney and Dempsey in 1927

During the 1920s, up to 10 million people would go to the cinema every day