THE “ROARING’ ECONOMY OF THE 1920’S

1927 Ford Model T – the automobile was the symbol of the “new era” in American business

A Booming Economy: The 1920’s

Income increases

People purchase more goods

Companies earn higher profits

Companies expand and hire more people

“Boom Cycle”

· Henry Ford used assembly lines to produce cars.

Impact of the Car Industry

http://www.autolife.umd.umich.edu/Labor/L_Overview/Ford_Assembly_Lines.htm

http://www.solpass.org/7ss/standards/StudyUSII.5.htm

http://faculty.virginia.edu/hius341/images/objects/fordassemblyline.jpg

Model-T 1909 - $850

1916 - $360

1924 - $290Access Inflation calculator for today’s cost.

· The efficiency of the assembly line helped to decrease car prices.

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The following industries grew as a result of the booming car industry:

construction (roads and bridges)

steelrubber

glass

paint

oil

housing (as the suburbs grew)

* Employment and the standard of living increased.

•As World War I ended, technology focused on consumer goods. (Ex: radios, washing machines, telephones, and cars)

* An increase in wages caused an increase in buying power.

1925 RCA Radiola Super VIII

“Conspicuous Consumption”• Buying to show off – flaunt your wealth

• Name brands, expensive price tags, the first one to own…

• Keep up with “the Jones” (neighbors)!

USE YOUR TEXTBOOK

• Pgs. 693-699

• Make a list of all the many changes in business and the economy that developed throughout the 1920’s…..

“New Era” of Business

• New Products– Vitamins– Belt and bucket conveyor– Model T– Wristwatches– Canning– Cigarette lighters– Skyscrapers– Radio

• New Policies– Credit/Installment

payments– “scientific management”

• Efficiency increases

• Profits increases

• The American Plan– End “closed shop”– Yellow dog contracts– “welfare capitalism”– “Kiss Me Clubs”

• Doctrine of Wages– $5 Day (H. Ford)

1920’s Business World

• Mass Production

• Mass Media

• Materialism

• Modern Corporate Bureaucracy