American people and the "Boom"

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economic boom

a rapid growth in a country’s economy within a short time period

why didn’t the farming industry benefit from the boom?

• Europe’s poverty after WW1 along with tariffs made US exporting difficult

• More land was harvested with higher efficiency, leading to overproduction

• Low demand meant plummeting prices and banks shutting down.

statistics to show the farming industry struggle

• 1920s, a farmer grew enough for the family + 14 more people

• 60million Americans in rural areas were affected from banks, displacement, etc

• Total US farm income dropped from 1919 $22 billion to $13 billion in 1928

exemption to the farming industry struggle

Rich people wanted fresh produce(fruit and veg)

• exports rose from 14k crates in 1920 to 52k crates in 1928

why didn’t the coal industry benefit from the boom?

• New industries(like electricity, gas and oil) became widespread

• Owners didn’t always sack miners, rather reduced work hours meaning lower wages

statistics to show the coal industry struggle

• In early 1920s, there were 12k mines and 700k miners.

• By 1929, the average wage of a miner was $100, 3 times less than a NYC bricklayer.

why didn’t the railroad industry benefit from the boom?

• huge growth in car ownership with passenger traffic decline

• rapid developments on national road networks

statistics to show the railroad industry struggle

• electrical railroads built before 1914 fared particularly badly

exemption to the farming industry struggle

• companies increased their carrying of freights(goods) by 10%

  • (it would’ve been higher if not for the road network)

sharecroppers

when a tenant gives a share of crop to their landlord due to rent agreements

why didn’t African-Americans benefit from the boom?

• they were sharecroppers

• whites-only factories prevented them from work

• less labor needed in urban areas

why didn’t Native-Americans benefit from the boom?

• the soil in “reservations”(areas they were forced into) was too poor for crops

• lack of education and high-income skills

general statistics on the economic boom

• The richest 5% of the country made 33% of the GDP

• 21 individuals were millionaires in 1921, the number went to 15,000 in 1927

• 6 million families made less than $1000 yearly

republican

“laissez-faire”, staying out of people’s lives where possible

• lower taxes, business oriented, right-wing, conservative

democrat

intervening in everyday life if necessary

• helps those in need, left-wing, ordinary people, labor

the boom cycle

LACK PANTS

the driving causes towards the economic boom in the 1920s.

• L- Laissez-faire

• A- Assembly Line

• C- Credit

• K- Knowledge

• P- Position of USA(during WW1)

• A- Advertising

• N- New Consumer Goods

• T- Tariffs

• S- Share Confidence

Laissex-faire

In 1920s, all presidents were republican.

• Low taxes and regulations for businesses meant higher profit.

Assembly Line

Products were built bit by bit by different people, passed along a conveyor belt.

• automation meant increased supply for customer profitability

• companies are interdependent on each other so improve along with one another

Assembly Line Stats

• By 1925, a car was made once every 10 seconds by Ford

• 75% of glass production went to the motor industry

Credit

Buying a product and paying later over installments.(aka hire purchase)

• stimulates production as people can demand things with more flexibility

• continuous stream of income

Credit Statistics

• 8 out of 10 radios & 6 out of 10 cars bought on credit

• Half of all goods during the 1920s were paid this way

Knowledge

New technological developments

• more customer profitability

Knowledge statistics

• In 1912, 16% of Americans had electricity. In 1927, the number rose to 63%. This meant more profitability in electrical goods

Position of America(in WW1)

The USA had plentiful amounts of raw material such as oil, wood and iron. Not entering the war until 1917.

• This meant they were leading manufacturers

• Exported lots, especially to Britain & France

Isolationism

USA government policy representing refusal to be involved in European Political Events.

Position of America Statistics

• Between 1914-8, iron and steel exports increased from $251million to $1.113billion

Advertisement

Companies realized the potential of advertising

• stimulated unnecessary demand

• deceptive language influenced others

• brand competition was a new thing

Advertisement statistics

• In 1921, the company that made Listerine invented the word “halitosis” as a fake medical problem

• Within 5 years, sales rose from 100k to 4 million bottles a year

New consumer goods

New recently invented gadgets meant more money circulating within the country

New consumer goods statistics

By 1929, America made nearly 50% of the world’s consumer goods.

Tariffs

Foreign produced goods were made more expensive.

• less leakage keeps money circulating within the USA’s economy.

• USA’s goods are more appealing due to lower costs

Tariff statistics

• The Fordney McCumber Tax(the tariff, basically) was introduced in 1922

• Taxes were kept low for businesses

Share confidence

People would buy shares in a company and sell them on.

• more revenue for companies

• collateral wealth grows for USA(citizens earn more while company earns more)

Buying on the margin

Many borrowed money to buy shares, repaying the loans and keeping the profit.

• this represents the confidence in the economy

Share confidence statistics

• 4 million people owned shares in 1920. By 1929, there were 5 times as many

• In 1926, $3.2 billion was bought on the margin.

• By the summer of 1929, people borrowed a total of $8.5 billion to buy on the margin.