A Booming Economy

1. A Booming Economy 24.3

2. Growth in the 1920’s • For about two years after the war America experienced an economic downturn or a recession • The economy then began a steady growth that lasted most of the decade • In 1922 the nation’s Growth National Product (the total value of all goods and services produced) 70 billion and by 1929 it was 100 billion • Technology made rapid industrial growth possible, and electricity powered American industry

3. Scientific Management/Worker Relations • The hiring of experts to research how good could be produced more quickly • By adopting new methods found by the experts companies began increasing productivity (The amount of work each worker could do) • Many companies also encouraged workers to buy stock in the company • This was known as welfare capitalism and linked workers more closely to the companies they worked for

4. The Consumer Economy • Installment buying was introduced during this time • Consumers could now buy products by promising to pay small, regular, amounts over a period of time • The installment method boosted consumer spending

5. The Automobile Age • Henry Ford was a pioneer in the manufacture of affordable automobiles with his Model T, which was built using assembly line methods • Henry Ford then released the Model A in a range of colors to compete with GM • This is where the practice of introducing new car models each year came from

6. The Car’s Effects on Other Industries • New Roads • Highways • Gas stations • Rest stops • Tourism • Steel • Rubber • Glass • Oil

7. Those Left Behind • Farmers had an especially difficult time; during the war the government had purchased wheat, corn, and other products and the farmers had prospered from higher prices • When the war ended farmers had to compete with European farm prices again and not as much food was needed; unable to pay debts many farmers lost their farms • By 1929 75% of families had incomes below the poverty line