America in the 1920's

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America in the 1920’s
The Boom Period

During the 1920s there was a prolonged boom in the American economy. Industrial production doubled, the economy grew rapidly and fortunes were made. Life had never seemed better for the majority of the American people. The boom developed for a number of reasons.

World War I
The European economies were exhausted by the cost of waging a long war. In comparison, the USA grew rich during the war years. Its late arrival to the war, and the fact that its cities and industries were not bombed or destroyed during the conflict, meant that at the end of the war it was able to capitalise on the perilous state of European industry and dominate their markets.

New technologies
The first 20 years of the twentieth century saw huge technological advances in industry. Factories became automated. Machines and other improved manufacturing techniques meant that huge amounts of goods could be made at a fraction of the cost. The age of mass production had arrived. In the decade of the 1920s economic output increased by a staggering 50%.

Consumer boom
Because goods could be produced in greater numbers and at much lower prices, more people were able to afford them. This led to huge increases in the sales of products such as cars, refrigerators, radios and cookers.

Buying on credit
This consumer boom was greatly aided by the availability of hire purchase - the ability to buy goods on credit. Because times were good, people were not worried about having to keep up payments.

Government policies
Republican Presidents were in office from 1921 to 1933. They followed a policy of laissez faire, meaning that the government interfered as little as possible in the running of the economy. Instead, they believed that business should get on with the process of creating wealth. The government helped in this by keeping taxes as low as possible.…...

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