Causes of the Boom in the USA during the 1920s
A brief mindmap outlining the main causes of the Boom during the 1920s in the USA.
- Created by: BeccaS
- Created on: 22-05-13 19:33
View mindmap
- Causes of the Boom in the USA during the 1920s
- New Business Methods
- Introduction of Management Science
- Growing corporations and numbers of mergers increased profits
- by 1929, the biggest 200 corporations had 20% of the USA's wealth
- Cartels and holding companies were used to price-fix
- Advertising and salesmanship created new ways of promoting goods
- Influence in Foreign Economics
- High levels of investment in Europe
- Businesses expanded to other countries in order to have access to base materials
- Private investment in foreign countries rose to $17200 million by 1930
- Helped the Soviet Five Year Plans - Stalin was dependent on US exports
- Large export industry; motor exports to Canada destroyed the native companies
- Technical Advances
- Federal Highway Act (1921) - 10000 miles of roads built per year during the decade
- Electrical consumer goods - 160 million sold in 1929
- Ford began using methods of mass production such as the assembly line
- This reduced costs, but ensured that production was always higher than consumption
- Government Policies
- Tax reductions totalled $3.5 billion during the decade- but the government operated on a surplus
- Fewer business regulations
- Free Market - a system that allows the country to run itself with minimal government interference
- Laissez-faire
- Fordney-McCumber Act (1922) raised tariffs on all imports
- Isolationism
- First World War
- Increase in trade to Europe
- Corporate profits tripled during the war
- Farm profits rose by 25%
- Wages rose, women & African-Americans got jobs
- More capital avaliable for investment
- Easy Credit
- Few questions were asked when applying for credit
- Men earning $35 per week were paying that amount per month for their car
- By 1929, nearly $7 billion worth of goods were sold on credit including 75% of cars and 50% of major household appliances
- New Business Methods
Comments
Report