Causes of the boom

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  • Causes of the boom
    • Taxes
      • Andrew Mellon was secretary to the treausurary
        • He believed that government should not take part in economic life
        • He gave big businesses low taxes
        • Through out the 1920s Mellon cut taxes
    • Tarrifs
      • As well as low taxes, American government helped American industry by protecting it from import
      • In 1922 the Kordeny-Mccumber Tariff Act put high tariffs or duties in foreign goods
      • So Americans could buy them cheaper and more easily
    • Confidence
      • A major reason for the success of industry in the 1920s was the confidence of the American people
      • Not only did people have confidence in factories but to buy by higher prices
    • Mass production
      • Electricity was more readily available so more factories used it
      • Assembly lines produced goods at speed and in huge quantities
      • Henry ford - first car assembly line
    • Plentiful finance
      • During ww1 the USA gave huge loans to the allis
        • In the 1920s these loans were being paid with interest
        • Therefore banks had lots of money to lend to factories
    • Advertising
      • Mass advertising was used for the first time
      • Newspapers, magazines, billboards and the radio
      • "Keep up with your neighbour or shame on you"
    • Hire purchace
      • 1920s saw the beginning of the hire purchase method of payment
      • You would pay in instalments, if you didn't keep up with payments it was taken away from you


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