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22 Cards in this Set
- Front
- Back
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What was the extent of US prosperity during the 1920s? [ PEIC! ]
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1. America emerged from WWI as the most properous country on Earth
2. Many believed the USA would set an example to the world with its emphasis on technological developments, economic efficieny and minimal government interference in business 3. Production of industrial goods rose by 50% between 1922 - 1929 4. Real wage of industrial workers rose by 14%. Between 1914-1919 wages were twice that of those in Europe 5. Employees were working fewer hours + 6. Average unemployment never rose above 3.7% between the years 1922-29 Consumer goods increase: 7. Motor cars eased travel both to and from work and for leisure pursuits 8. Consumption of electricity doubled by 1929 9. Vacuum cleaners and washing machines were introduced and could be afforded by most people 10. $852 million worth of radios sold by 1929 11. Golden age of cinema (80 million tickets were sold for the movies) |
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Reasons for prosperity
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I LACK PANTS
Immigration Laissez Faire Assembly line Credit Knowledge Position of the USA in the world Advertising New consumer goods Tariffs Share confidence |
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How important was immigration in the USA in creating the economic boom of the 1920s?
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Brought a huge # of benefits
1. Brought skilled craftsmen, entrepreneurs and a large pool of unemployed labour from Europe and Latin America 2. Prepared to work in sweat shops for little money and long hours 3. Formed an important part of the supply and the demand for the American economy buying consumer goods 4. Provided seasonal labour on farms allowing food to remain cheap |
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How important were Republican Presidents in creating the economic boom of the 1920s?
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LAISSEZ FAIRE.
Policy: to keep businesses free of regulation thereby allowing the rich to continue investing in industrial development Intervention: supported businesses by tariffs on foreign imports, tax reductions, fewer regulations and foreign policies Industrial expansion -> create more employment, more wage earners, more consumption and therefore more industrial expansion |
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The Automobile Industry
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1. Largest market for commodities
2. 65% of workers in the America were saving to buy a car 3. Between 1914 - 1924, the price of a Model T fell from $950 to $290 allowing many more people to buy one 4. Petrol was cheap (20c a gallon compared with average wage of 50c an hour) 5. By 1920, Henry Ford produced one car every 60 seconds + end of 1920s, 26 mil cars on the road |
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How did the automobile industry affect society?
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POSITIVES:
1. Road building increased - Federal Highway Act (1921) gave responsibility of road building to central government 2. Other industries grew such as petrol, rubber, plate glass, nickel, tin, hardwood, upholstery and copper 3. Breadwinners could go further afield to seek work 4. Goods could be easily moved from factories to markets EXTRA GOODNESS: 5. Family bonding through outings 6. Used by courting couples NEGATIVES: 1. Only 1 type of car: Model T. Supply exceeded demand. 2. Customers preferred buying new models rather than old ones; the car design had to stay ahead of the market. 3. Car industry contributed to the 1927 recession. Due to poor sales, Henry Ford closed in 1927. While for a short time, 60,000 workers were laid off. Meant that less cars were produced, and thus less commodities needed. 4. Also responsible for an increase in road deaths and trade unionism |
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Other reasons for Economic Boom
(BB, A, C, + 2 more) |
BIG BUSINESS: public did not complain about dominance of big business as they saw them as heroes who had made possible the prosperity they were enjoying.
ADVERTISING: Ad possibilities increased with the arrival of the cinema and also the mass production of radios. Companies could advertise their products to a larger and more widespread audience easy CREDIT: Companies offered its consumers the chance of Hire Purchase (paying off products on a weekly basis) DOMINATED MANY FOREIGN MARKETS: eg: in the USSR over 25% of all foreign investment came from American businesses. In Canada, US dominated its motor and electrical industries Private investments increased from $7000 in 1919 to $17,200 in 1930 |
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The problem with evidence (prosperity)
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1. Figures give us an overall picture but do not tell us about individual circumstances.
2. Unemployment figures do not tell us whether the low figure applies to all areas of industry or did some suffer high or seasonal unemployment 2.1 In addition, were many employees part time, and what could they buy with their money? 3. Was the overall prosperity spread throughout the nation or was it principally located in specific parts of the country? Did it apply to all ethnic groups? |
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Did everyone benefit from the boom? WOMEN
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1. Women were expected to concentrate on marriage and homemaking
2. By 1930 there was only 150 women dentists and 100 female accountants 3. Only two women in the house of Reps 4. Number of women receiving college education fell by 5% during the decade 5. Women jobs still tended to be in low paid and menial jobs |
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Did everyone benefit from the boom? AFRICAN AND NATIVE AMERICANS
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1. 85% of African Americans lived in the poorest regions, and 2. even when they tried to migrate in search of a better standard of living, they were faced with discrimination in housing and unemployment.
3.Thanks to the lack of employment opportunities, African Americans were unskilled. Native Americans suffered a similar mistreatment – 4. they were forced to try and stick out a miserable existence on infertile land. 5. the KKK never made things easy for anyone, as they terrorized much of the Mid West and the South. |
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Did everyone benefit from the boom? FARMERS
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1. After the war, the price of wheat fell from $2.50 to $1 per bushel, and this may be because 2. the high standard of living now led to people eating more meat and less cereals.
3. Prohibition can also be to blame – the demand for grain previously used in the manufacturing of alcohol was cut. 4. A good thing that may be argued is that technical advances meant that more crops could be produced for the same or less acreage. In fact, farm population fell by 5%, but production increased by 9%. 5. But, ironically, this didn’t help farmers at all – it turned out that because many farmers were now more efficient though mechanization and other new techniques (such as using improved fertilizers), now they were producing too much. Prices for their harvests fell, and continued to fall. |
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What role did the government play in problems facing farmers?
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1. Farmers outraged that tariffs protected industry, and not agriculture.
2. The US wanted to industrialize, so it was important to redirect manpower and resources from agriculture to industry. 3. Two Acts were passed, but neither helped. The Agriculture Credit Act only helped large farms, and the Fordney McCumber Act simply caused problems for farmers because while it protected food imports, foreigners simply retaliated by placing high tariffs on American goods; now US farmers couldn’t get rid of any of their surplus. 4. Coolidge unwilling to pass through bills as he felt they would fail to address the overall question of overproduction. He did not want to sour relations with foreign countries by 'dumping' cheap US foodstuffs to their countries thus damaging their own agricultural sectors. 5. The unwillingness of the government to act meant more and more small farmers saw mortgages foreclosed thus losing their land that had been in their families for generations |
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Why was organised crime able to grow in size and influence during the 1920s?
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1. Organised crime was big business, and operations were set up in all major cities
2. Criminal organisations had their own enforcers (gun-men) to protect their businesses 3. Criminal networks were established, often linked to particular immigrant groups such as Italians or Irish Americans 4. Prohibition the key factor in making organised crime organised. 4.1 Alcohol was closely linked to other enterprises already controlled by criminal gangs, such as gambling and prostitution 4.2 The production, distribution and selling of alcohol handed criminals the opportunity to control a huge multi-million dollar industry 4.3 Because so many otherwise decent people opposed Prohibition and were willing to see the law broken, there were willing consumers and many policemen and public officials were ready to accept payoffs 4.4 Prohibition provided the ideal conditions for organised crime to grow bigger and gain some kind of respectability and acceptance in the eyes of otherwise law abiding people |
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The effects of crime on US society
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1. Provided countless job opportunities
2. Blurred the boundaries between crime and decent society 3. Sensational reporting of crime in newspapers made gangsters and bootleggers appear as larger than life celebrities 4. Huge numbers of law abiding citizens continued to drink illegally (poor - home made alcohol; rich - frequented speakeasies) 5. Moralists saw the explosion in gangland violence as proof that alcohol was indeed the source of all wickedness and that Prohibition was more necessary than ever 6. Others in society felt Prohibition had failed to reform American society and so should be repealed |
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What problems did American society face in the years after WWI?
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Refusal to ratify peace treaties + join LoN -> isolationism and focus on domestic problems
1. Re-emergence of Ku Klux Klann in early 1920s brought many problems for Black Americans. Those living in Mid West + Southern states faced prejudice, violent attacks and even lynching. Little done to stop them; high profile members of US gov supporters. Jews+other immig. also suffered abuse and persecution. 2. Many immig suffered terribly after the war. American paranoia w/ communism ->> Red Scare. Palmer Raids followed ->> arrest and deportation of many Europ. immig, many of whom innocent. Sacco and Vanzetti arrested+eventually executed for an apparant murder they never committed. Crime = italian immig 3. Boston Police Strike. Poor pay to its workers + not being able to join a union. Two days of lawlessness commenced on streets of Boston as armed people looted from shops in unguarded state. Criminal gain from this little compared to.. 4. Prohibition. Illegal selling of alcohol allowed criminal organizations to |
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What problems did American society face in the years after WWI?
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Criminal gain from this little compared to..
4. Prohibition. Illegal selling of alcohol allowed criminal organizations to grow rapidly and in effect these gangs ran many cities in America. eg Al Capone known to bribe many Chicago Police officers thus allowing his criminal org to prosper. Gun battles+bombs regular occurrences as crim gangs tried to wipe out opposition eg: St Valentine's Day massacre 5. Problems within schools: debate grew regarding teaching evolution. Culminated in the Scopes Trial or Monkey trial as it is better known. Much of society split on the morality of this issue. 6. Farmers faced issue of overproduction and less demand for produce and inevitably prices fell dramatically after war. Prohibition had cut demand for grain 7. Women suffered >> hopes for equality never materialized. 8. Native Ams >> eked out a miserable existence on infertile reservations |
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Why did the Wall Street Crash in October 1929?
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- A massive amount of selling begun in the New York Stock Exchange (Handled 61% of all transactions in USA)
- The selling forced prices down and led to more selling as brokers felt they would be left and useless stock - As companies value begun to drop, no one appeared to understand what was going on - Due to the volume of sales, the ticker could no longer keep pace. Brokers begun to realise that stocks they had bought moments earlier were now worth considerably less than they had paid for them - As more and more brokers rushed to sell, the scenes became so wild that police had to be called in to restore order |
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Why did the US economy go into the depression?
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-Overspeculation: the majority of the people feel the stock market will go up, so they greedily buy, when in reality it's reached the peak already and stock market prices will soon drop
- Living off credit and get rich quick schemes - Depression in staple industries (agr, construc) - Over production and falling demand - The crash was a financial issue, whereas the Depression had deeper concerns of which financial concerns were only one - However, the crash was an important trigger in that it worsened the Depression - |
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What were the causes of the Wall Street Crash?
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One of most frequent criticisms of the 'Great Bull Market': no effective control over its activities. Gov pursued policies of laissez faire and the regulatory powers of the Central Banking System were severely limited.
FRB could have intervened by selling gov securities, raising interest rates or through moral leadership. Many historians agree that the FRB's other actions, such as lowering rediscount rates triggered the Wall Street Crash, as they encouraged more people to borrow. NATURE OF THE BULL MARKET Confidence in economy and market. By 23rd Nov 1928 7mil transactions had taken place. Further speculation by anecdotes (nurse). Optimism fuelled by Hoover gov statements. Desire to get rich quick Instability in the market: falls (1928, 29) but recovered. skeptical experts predicted crash that would lead into depression but criticised for being to pessimistic Media encouragement : stock market investment was encouraged by the popular press. eg one article stated that if people saved $15 a month and inve |
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What were the effects of the crash on the US economy?
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Collapse in:
BUSINESS - Lost investments -> many individuals + businesses lost billions of dollars; thousands bankrupt - Even those who stay afloat suffered and couldn't afford to consume or invest any further - Huge # of worker cutbacks - Many now unemployed -> less money in economy to spend - Advertising now losing its influence on people - Much of 1920s prosperity had come from consumer durable sales - industries that supplied these goods faced an ever-falling demand for this. CREDIT Stock M crash -> collapse of credit - For most, borrowing from the bank and investing in the stock market had been their method of getting 'rich quick'. - But now loans were being called in and new ones refused, making a financial risk at this point was something no one was prepared to do CONFIDENCE - End of confidence in the US economy - Many seen big businesses as their 'heroes' - shocked and betrayed by both trusts and the gov. - Because of this loss in confidence, people didn't believe them when a return to pros |
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Underlying problems in the US economy before the Wall St crash [SUTEB!]
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1. Enthusiastic purchase of cars and consumer goods slowed down. Companies had large stocks to sell so not needing more goods, laid off workers. Umemp /=/ consumers
2. Unequal distribution of wealth made wealthy richer but much of their expenditure on lifestyle or stock market spec, not manufactured goods. Could not make up for lack of purchases by newly umemployed 3. High tariffs - exporting to USA less attractive - bought fewer American goods - added to decline in consumer sales 4. Farmers prospered during war but soon lost expanded markets abroad. Farm incomes: 1919 - $22bil; 1928 - $8 bil. Lower demand = lower prices = lower income. Found it difficult to repay loans on land or buy new equipment 5. Businesses - kept prices high and increased profits but not paid higher wages. Too little spare money around to buy goods and revive economy |
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How successful was organised crime in the years 1920 - 1933?
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SUCCESS1: Smuggling of illicit liquor during the prohibition era was very lucrative and grew particularly in the 1920s
SUCCESS2: Booze imported from Carribean and Canada in ever increasing amounts SUCCESS3: Illicit production continued + speakeasies grew in number FAIL1: Decline in drinking, particularly outside of large cities SUCCESS4: While organised crime was able to control cities such as Chicago FAIL2: Many rural areas were never penetrated by organised crime SUCCESS5: Gangs grew in size and infamy eg:Capone SUCCESS6: Bribed city officials who were very poorly paid FAIL 3: Some criminals within the gangs died young due to feuds and turf wars + FAIL4: The IRS was able to put Al Capone in prison in 1931 on tax evasion charges FAIL5: Law enforcement agencies, such as the 'Untouchables', did have some success in curtailing some activities by smashing stills and catching the smugglers, as did border officials and naval patrols SUCCESS7: The operations of criminal gangs spread into bookmarking, numbe |
