Topic 6 The Economy During the 1920s

1. Topic 6 The Economy During the 1920s

2. 1920s Link, Videos #6-11

3. After the period of readjustment following World War I and the Recession of 1921-1922, the economy during the rest of the decade boomed so much that people began to refer to the 1920s as the “Roaring Twenties.” 1920s boom in per capita income, on left side (note: 1958 dollars, not 1920 dollars)

4. The Gross Domestic Product (GDP) exploded (chart shows constant 1999 dollars)

5. Manufacturing boom throughout the 1920s Employment in manufacturing (note 1920s)

6. There were a number of reasons for this emerging economic boom. First, Europe was devastated after WWI and needed help, which was an opportunity for American business

7. Dawes Plan US Germany GB, France The Dawes Plan helped build up Europe, making European countries strong trading partners of the US, improving the American economy

8. Cheap and readily available sources of energy throughout the 1920s contributed to a growing economy

9. A number of hydroelectric dams began to be built, most notably Hoover Dam on the Colorado River

10. During the Progressive Era most people saw the wealthy as robber barons, living off the labor of the workers

11. In the 1920s people saw wealth as a virtue, evidence of hard work and even godly. Bruce Barton wrote the book The Man Nobody Knows, which depicted Jesus as a good businessman

12. Frederick W. Taylor New strategies at running large businesses contributed to the growth, most notably Frederick Taylor’s Scientific Management

13. Consolidation in businesses may have raised worries about monopiles and the extinction of smaller competitors, but large businesses were able to devote more resources to research, development, and distribution, as well as lowering prices. You can see this in the expansion of department stores.

14. The expansion of banks, both in size and number of branches, meant easier credit

15. Consolidation in business even led to the development of “Holding Companies” where one corporation would buy and control another corporation, thereby coordinating their businesses. To the left is an example of a “Holding Company”

16. Cities grew with new styles in construction, including “Art Deco” in places like Miami

17. The number of cars exploded in the 1920s

18. Ford Motor Company’s Model T dominated the auto market early in 1920s

19. Henry Ford and his Ford Motor Company continued to dominate the auto industry, but new competitors were rapidly emerging

21. GM pushed multiple options and models and helped develop the idea of cars as status symbols

22. New cars created the need for new roads

23. New roads meant new jobs and a better, more mobile economy

24. New gas stations everywhere, with a new profession of auto mechanics

25. New roads and cars meant a suburban construction boom – and a booming economy. Once again the construction included new, distinctive styles, such as “breakfast nooks”

26. Suburbia became distinctive from earlier construction in a lot of ways

27. Barnstormers popularized air travel

28. First Airmail 1925

29. First regular air travel, 1926

30. Airports meant additional economic boom

31. New electrical appliances

32. Electricity meant jobs building growing infrastructure, from generators to wiring in houses

36. Radio Corporation of America (RCA) creates first national broadcast and first radio network

37. New companies formed to create shows for radio

39. Rise of advertising contributed to consumerism, as did installment buying and the extension of credit

41. Madison Ave in the early 1920s

42. The new “Movies” industry exploded with new technology

43. The movie industry employed a lot of people

44. The construction of movie “theaters” meant more jobs