From War to Peace

1. From War to Peace 19.2 A New Economic Era

2. Ford Revolutionizes Industry • The first cars in America appeared in the 1800’s but remained a toy for the rich through the early 1900’s • During the 1920’s, the Model T appeared and became a fixture of American life The Model T

3. The Assembly Line • Custom-made cars were extremely expensive to build . . . • Ford had to come up with a way to make production cheaper if he wanted to create a “motor car for the great multitude” • Enter the Assembly Line! • A production system in which the item being built moves along a conveyor belt to various workstations • On Ford’s assembly line there were eighty-four specific jobs • In it’s first year, the Ford assembly line produced a car every hour and a half • Ford’s employees made an average of five dollars per day, enabling them to buy cars

4. The Conveyor Belt “The man who puts on a bolt does not put on a nut. The man who puts on the nut does not tighten it.”

5. The Model T • The car sold for under $500, about half the cost of the first Model T’s • The price still wasn’t cheap, but many more people could afford it • By the 1920’s, Ford was rolling out a car every minute and the price had dropped even lower • By 1922, twenty-two million cars were rolling along the unpaved roads of the nation

6. The Effect on Industry • During the first quarter of the century, Ford dominated automaking, but in the 1920’s Chrysler and General Motors began to improve upon Ford’s design • Competition in the industry led to vast economic growth, and other industries also learned from Ford and his assembly line

7. Welfare Capitalism • The success of business in the 1920’s led to a growth of what is called ‘welfare capitalism’ in an effort to defeat organized labor • A system in which companies provide benefits to employees in an effort to promote worker satisfaction and loyalty. • Health insurance • Pensions/Retirement plans

8. Industry Changes Society • Demand for steel, glass, rubber, etc all increased • Repair shops began to spring up • Motels and restaurants arose to meet the needs of travelers; this produced a new industry - tourism • Gas became a hot commodity • Suburbs began to pop up everywhere • The auto industry put the city of Detroit, MI - where Ford’s manufacturing operations were located - on the map . . . • In 1910, fewer than 500,000 people lived there; within twenty years the population had tripled

9. The New Consumer New Products • Electrical appliances • Refrigerators • Vacuums • Radios • Passenger airplanes • Installment buying • Paying for an item over time in small payments instead of paying for an item in full • ‘Credit’ a.k.a. borrowing money with a promise to re-pay • By the end of the decade, consumers bought ninety percent of durable, long-lasting goods (i.e., cars and appliances) on credit New Ways to Pay

10. Weaknesses in the Economy • The era that brought the boom in cars, consumer goods, radio, and advertising earned the nickname ‘The Roaring Twenties’ • The farmers, however, did not get to take part in the fortune the rest of the nation was enjoying • European farmers drove down US prices • Insects infested and destroyed cotton crops in the South • The Mississippi River flooded, drowning crops in the South • “The Big Blow”, the strongest hurricane recorded up to that time occurred in Florida • One of the most destructive hurricanes ever

11. Assignment: Reviewing Ideas, Terms, and People (Pg. 633) • 1. What was the assembly line? How did it affect Ford’s ability to make automobiles? • 2. What was the effect of the boom in the auto industry on other industries? Why could industrial changes be said to change the map of the United States? • 3. Write a brief definition for each of the following terms: installment buying, credit • 4. What change occurred in consumer attitudes in the 1920’s compared to earlier times? How did the changes in consumer behavior make possible the growth of the American economy in the 1920’s? • 5. What part of the American economy did not enjoy prosperity in the 1920’s?