CHAPTER 11 SECTION 1 A BOOMING ECONOMY

1. CHAPTER 11 SECTION 1 A BOOMING ECONOMY

2. Vocabulary: Henry Ford mass production assembly line consumer revolution installment buying bull market buying on margin Model T Scientific management

3. IN THE DECADES THAT FOLLOWED • WORLD WAR I THE AMERICAN ECONOMY • EXPERIENCED TREMENDOUS GROWTH • – USING REVOLUTIONARY MASS-PRODUCTION • TECHNIQUES, AMERICAN WORKERS • PRODUCED MORE GOODS IN LESS TIME THAN • EVER BEFORE • – HELPED CREAT THE MODERN CONSUMER • ECONOMY

4. AUTOMOBILES • MOST OF THE GROWTH WAS CAUSED BY THE • AUTOMOBILE INDUSTRY • – HENRY FORD INTRODUCED A SERIES OF METHODS AND • IDEAS THAT REVOLUTIONIZED PRODUCTION, WAGES, • WORKING CONDITIONS AND DAILY LIFE • FORD DID NOT COME UP WITH THE IDEA OF • MASS PRODUCTION– THE RAPID MANUFACTURE OF • LARGE NUMBERS OF IDENTICAL PRODUCTS • – HE EXPANDED IT

5. EARLY ON ONLY WEALTHY CITY DWELLERS • COULD AFFORD CARS • – AUTOMOBILES WERE SEEN AS A SYMBOL OF • THE CLASS DIVISIONS IN THE COUNTRY • RANSOM OLDS INTRODUCED A LESS EXPENSIVE • CAR IN 1901 • – THE OLDSMOBILE BUT • HENRY FORD INTRODUCED THE MODEL T • – A RELIABLE CAR THAT AVERAGE AMERICANS • COULD AFFORD • – FIRST ONE SOLD FOR $850

6. FORD OPENED A PLANT IN DETROIT, MI AND • HIRED SCIENTIFIC MANAGEMENT EXPERTS TO • IMPROVE HIS MASS-PRODUCTION TECHNIQUES • SCIENTIFIC MANAGEMENT WAS A METHOD OF • IMPROVING EFFICIENCY WHERE EXPERTS • LOOKED AT EVERY STEP OF PRODUCTION TO • FIND WAYS TO REDUCE TIME, EFFORT AND • EXPENSE

7. FORD PUT HIS CARS ON A MOVING • ASSEMBLY LINE– WHERE AT EACH STEP A • WORKER ADDED SOMETHING TO CONSTRUCT • THE AUTOMOBILE • – REDUCED TIME TO MAKING THE MODEL T TO • ONLY 90 MINUTES • THE ASSEMBLY LINE ALLOWED FORD TO • DROP THE SALES PRICE OF A MODEL T • – BY 1927 IT ONLY COST $290

8. THE MODEL T WAS SLOW AND ONLY AVAILABLE IN BLACK • – IT WAS THE FIRST CAR ORDINARY • PEOPLE COULD AFFORD • – BY 1927 56% OF AMERICAN FAMILIES • OWNED AN AUTOMOBILE

9. FORD AND HIS WORKERS • HE MORE THAN DOUBLED THEIR WGES FROM $2.35 • TO $5.00 PER DAY AND REDUCED THEIR WORKDAY • FROM 9 TO 8 HOURS • FORD BECAME THE FIRST INDUSTRIALIST TO GIVE • HIS WORKERS SATURDAY AND SUNDAY OFF • – HE REALIZED THAT IF WORKERS HAD MORE • MONEY AND MORE TIME OFF THEY MIGHT • BECOME POTENTIAL CUSTOMERS • FORD ENGLISH SCHOOL*******

10. Ford English School

11. Impact of the Automobile By the 1920’s, the growing “car culture” was changing the nation in deeper ways than even Ford might have imagined. Automobiles encouraged the growth of related industries -especially the oil industry The gas station and gas fumes became a permanent part of the US landscape

12. Impact of the Automobile The Highway System By 1925, states had built hundreds of highways, and the federal government organized them into a numbered system. One of the first federal highways was Route 66, which ran from Illinois to California.

13. Impact of the Automobile Advertising Ads stressed what cars gave their owners - speed, status, and a new sense of freedom.

14. Impact of the Automobile Vacation Industry Americans used their new cars and expanded leisure time to travel. Motels and motors camps sprung up all over the nation.

15. Automobile Changes America • THE AUTO INDUSTRY STIMULATED GROWTH IN OTHER INDUSTRIES RELATING TO CAR MANUFACTURING: • 1. STEEL-about one-seventh of all output was used to make cars • 2. GLASS • 3. RUBBER • 4. ASPHALT • 5. WOOD • 6. GASOLINE • 7. INSURANCE • ROAD CONSTRUCTION • – BOOMED WHEN THE FEDERAL • GOVERNMENT INRODUCED THE • SYSTEM OF NUMBERED HIGHWAYS • IN 1926

16. Automobile Changes America • THE MILLIONS OF CARS ON THE ROAD LED TO THE NEED • FOR OTHER INDUSTRIES: • GAS STATIONS • DINERS • MOTOR HOTELS • – LATER SHORTENED TO MOTELS • THESE CONTRIBUTED TO NATIONAL PROSPERITY • THE AUTOMOBILE HURT RAILROADS AND TROLLEYS • – BIG DECLINE IN USE • – PEOPLE COULD TRAVEL ON THEIR OWN TIME INSTEAD • OF ON A SCHEDULE • AUTOMOBILES LED TO CHANGING RESIDENTIAL • PATTERNS • – PEOPLE COULD LIVE FURTHER AWAY FROM THEIR JOB • – LED TO THE DEVELOPMENT OF SUBURBAN • COMMUNITIES

17. Economy • THE 1920’s SAW A • CONSUMER REVOLUTION • – IN WHICH A FLOOD OF • NEW, AFFORDABLE • GOODS BECAME • AVAILABLE TO THE • PUBLIC • – SUPPORTED BYELECTRICAL • POWER • – ELECTRIC WASHING MACHINES, • VACUUM CLEANERS AND IRONS • – ALSO RADIO ANDREFRIGERATORS

18. Economy • ADVERTISING HELPED CREATE • THE CONSUMER REVOLUTION • – MAGAZINE AND NEWSPAPER • ADS OFTEN FOCUSED ON • THE DESIRES AND FEARS OF • AMERICANS MORE THAN ON • WHAT PEOPLE REALLY • NEEDED • – CONVINCED PEOPLE THEY • COULD BE WHAT THEY • WANTED TO BE IF THEY • WOULD BUY THE RIGHT • PRODUCT

19. Economy • NEW WAYS OF BUYING HELPED • TO CREATE THE CONSUMER • REVOLUTION • – PEOPLE DID NOT ALWAYS • HAVE THE MONEY TO BUY • SOMETHING COULD BUY ON • CREDIT • – INSTALLMENT PLAN • – ALFRED P. SLOAN • – ALLOWED PEOPLE TO MAKE A • DOWN PAYMENT AND THEN • PAY OFF THE REST IN • REGULAR MONTHLYPAYMENTS

20. BULL MARKET • DURING THE 1920’S THE STOCK MARKET • ENJOYED THE BULL MARKET • – A PERIOD OF RISING STOCK PRICES • – MORE PEOPLE PUT THEIR MONEY IN THE • STOCK MARKET TO GET RICH QUICK • AS THE MARKET ROSE PEOPLE BEGAN • BUYING ON MARGIN • – A BUYER PAID AS LITTLE AS 10 PERCENT OF • THE STOCK • – ONLY WORKED AS LONG AS PRICES REMAINED • HIGH • – HAD TO PAY OFF DEBT REGARDLESS OF PRICE • UPFRONT TO A BROKER AND THEN PAYED FOR THE • REST OF THE STOCK OVER A PERIOD OF MONTHS

21. Cities,Suburbs, and Country • NOT ALL PARTS OF THE NATION WERE PROSPEROUS • – RURAL AMERICANS FACES HARD TIMES • PEOPLE BEGAN TO GO TO THE BIG CITIES • – AFRICAN AMERICANS MOVED NORTH DURING THE • GREAT MIGRATION • – MEXICAN AMERICANS MOVED TO SOUTHWESTERN • CITIES

22. Cities, Suburbs, and Country • CITIES BEGAN TO TAKE ON A • DIFFERENTLOOK BECAUSE OF ALL • THE PEOPLE MOVINGTHERE • – BEGAN BUILDING SKYSCRAPERS • – EMPIRE STATE BUILDING IN • NEW YORK • – FINISHED IN 1931 • – CHRYSLER BUILDING 1928 • – WORLD’S TALLEST BUILDING • DURING THISTIME (PAGE 328)

23. Cities, Suburbs, and Country • BECAUSE OF TRANSPORTATION • SUBURBS BEGAN TO GROW • – DRAINED PEOPLE AND • RESOURCES FROM THE CITIES • – SUBURBS CATERED TO MIDDLE • AND UPPER CLASS CITIZENS • – MOST TENDED TO BE • CONSERVATIVE AND REPUBLICAN • AMERICA’S WEALTH WAS • UNEQUALLY DISTRIBUTED • – INDUSTRIAL WAGES ROSE • SLOWLY AND FARMERS INCOMES • DECLINED (PAGE 329)