1920’s Business Boom!1920’s Business Boom!

How does the boom lead to the bust?How does the boom lead to the bust?

“Here was a new generation,…dedicated

more than the last to the fear of poverty and the worship of success; grown up to find…

all wars fought, all faiths in men shaken.”

-F. Scott Fitzgerald, This Side of Paradise

Basics of Economic Boom!

Increased standard of livingIncreased standard of living Rise of new industriesRise of new industries Changes in consumer behaviorChanges in consumer behavior Increased advertisingIncreased advertising

Increased Spending Higher wagesHigher wages

– Ford doubled workers wages from Ford doubled workers wages from $2.50 a week to $5.00 a week.$2.50 a week to $5.00 a week.

Clever AdvertisingClever Advertising- How do advertisers today make us - How do advertisers today make us

buy their products?buy their products?– Advertisers connected products to Advertisers connected products to

the modern era of the 1920’s.the modern era of the 1920’s.– Ex: “Say it with flowers”Ex: “Say it with flowers”

New products, especially electric New products, especially electric appliancesappliances

-60,000 families in 1922 had -60,000 families in 1922 had radiosradios

-9,000,000 motor vehicles were -9,000,000 motor vehicles were registered in 1920registered in 1920

Increased Spending Availability of consumer creditAvailability of consumer credit

-Attitudes about debt shifted. It was no -Attitudes about debt shifted. It was no longer considered shameful.longer considered shameful.

-Advertisers told consumers to “buy now and -Advertisers told consumers to “buy now and pay later.”pay later.”

- 75% of the radios purchased in the 1920’s - 75% of the radios purchased in the 1920’s were on credit as were 60% of the cars.were on credit as were 60% of the cars.

-Consumer debt rose from $3 billion dollars -Consumer debt rose from $3 billion dollars in 1921 to $7 billion dollars in 1929.in 1921 to $7 billion dollars in 1929.

Consumerism – Higher wages and shorter work Consumerism – Higher wages and shorter work days resulted buying binge for the 1920’s.days resulted buying binge for the 1920’s.

Rise in Productivity New resourcesNew resources

– More access to natural resources such as oilMore access to natural resources such as oil

New management techniquesNew management techniques– As companies grew, the number of managers also As companies grew, the number of managers also

increased. They were in charge of the different increased. They were in charge of the different departments in a company.departments in a company.

– Impact of assembly line processImpact of assembly line process Over production?Over production?

New technologiesNew technologies– Automobile, Airplane, Electronic appliancesAutomobile, Airplane, Electronic appliances

How will these type of things change the way Americans live?How will these type of things change the way Americans live?

Warning Signs:

What are three different warning signs that What are three different warning signs that the era of Boom is about to become the era the era of Boom is about to become the era of Bust?of Bust?– 1.1.– 2.2.– 3.3.

Meanwhile, back at the farm… Even though business was booming in Even though business was booming in

America, many farmers were suffering.America, many farmers were suffering. During the war, farmers had been During the war, farmers had been

encouraged to grow many crops to support encouraged to grow many crops to support the troops. The crops were needed, which the troops. The crops were needed, which kept prices up. After the war, a major price kept prices up. After the war, a major price dropped occurred, which severely hurt dropped occurred, which severely hurt farmers. farmers.

Also, in the Midwest, farmers were Also, in the Midwest, farmers were receiving little rain…this would receiving little rain…this would lead to what will later be called lead to what will later be called the Dust Bowl.the Dust Bowl.