Download Economy of the 1920`s

Economy of the 1920’s
By Sydney, Victoria, and Eleanor
Automobiles
Henry Ford
- mass production: “the rapid manufacture of large numbers of identical products”
- they tried to appeal to the people by trying to make the cars less expensive, because before only the
rich could afford them
o thus the Model T became popular because it was a car that “ the average American” could
purchase because it was only $850
- scientific management: “approach to improving efficiency, in which experts looked at every step of a
manufacturing process, trying to find ways to reduce time, effort and expense
o this was kind of a new method in which they would have people find ways “to reduce time,
effort, and expense” in producing cars
- he uses assembly lines to produce the cars, each worker would add something to the car as it went
along the line
 this reduce the time to produce a car immensely, from 12 hours to only 90 minutes
- in 1919 only 10% of American families owned a car, by 1927 56% of American families owned cars
- with his business booming, he doubled the wages of the workers from $2. 35 to $5.00, he reduced their
work day by an hour, and gave his workers Saturday and Sunday off, hoping that they would become
future customers
Changing America
- the steel, glass, rubber, asphalt, wood, gasoline, insurance, and road-construction industries all started
to grow
o because of the increase car production there was a greater need for the materials
 they also opened up many jobs because they needed for factory workers to produce
the products, and pay increased
- but, it also caused a downfall in our economy because everyone was using cars, and no one was using
the railroads and trolleys because now people didn’t have to be on a schedule
- it also change the location were people were living, because they had their own way of transportation
they now could take jobs farther away, which created housing along the highways and roads
Impact
- Gas Stations started to pop-up everywhere with cars sales increasing
- The United States built the Highway System, so that people could get around easier in their cars
- with more people being able to travel easier, motel and motor camps started to appear all over the
United States, and vacationing was becoming very popular
Consumer Revolution: “a flood of new, affordable goods became available to the public”
Advertising and Credit
- installment buying: “when a consumer would make a small down payment and then pay off the rest of
the debt in regular monthly payments”
o this now allowed the American people to buy more products that they could not have bought
before
The Big Bull Market
- with Americans buying much more than they had before, the stock market started to rise greatly
o this was call bull market: “a period of rising stock prices”
- buying on margin: “another form of buying on credit”
o using this they only had to pay 10% of the stock price and then pay the rest over a period of
months
 it usually worked to the buyers advantage because as the stock rose it became easier
and easier to pay of the loan because they were making profit
Living Situations
Cities: in this time (the 1920’s) more immigrants started to move to the cities, farmers moved to the cities,
the African American Great Migration was towards cities (although mostly northwestern), and Mexican
Americans also started to cross the border and move into cities (most of them being southwestern)
Suburbs: urban workers moved to the suburbs , and were mostly found in suburban areas
Country: the farmers were experiencing declines in their incomes and they were the poor outsiders of the
economic gain