Government encouragement for businesses and laissez-faire economics
- Created by: Franki12
- Created on: 16-04-17 15:50
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- government encouragem-ent for business and laissez-faire economics
- Republican governments and the economy
- favoured minimal interference in economy
- favoured low taxes
- favoured limited government activity
- tended to operate at financial surplus due to minimal spending
- laissez-faire
- intervened as little as possible in economy
- fewer regulations for businesses and low taxes
- government didn't accept responsibility in times of recession or for those that did not share in prosperity
- economic policies 1920s
- tax reductions
- reduced taxes in 1924, 26, and 28
- largely favoured the wealthy
- Mellon gave out reductions of $3.5 billion to large scale industrialists and big corporations
- fewer regulations
- government interference minimal, numbers of government employees limited
- difficult to enforce what regulations there were (laws against price fixing to prevent unfair competition)
- few laws protecting labour - children widely employed
- textile mills of the South - 56 hour weeks common
- government interference minimal, numbers of government employees limited
- advantageo-us foreign market
- government encouraged businessmen to invest abroad
- United Fruit had larger budged in Costa Rica than its government
- high tariffs
- Fordney-McCumber tariff, 1922, raised tariffs to cover difference between imported and domestically produced goods
- made US produced goods cheaper in home market but difficult to sell abroad as foreign governments reciprocated with their own high tariffs
- limited foreign trade - bad if home market collapses
- tax reductions
- hire purchase
- easy availability of credit fuelled economic prosperity
- deposit followed by weekly payments
- used for many of the newly mass produced cars
- by 1929 $7 billion worth of goods bought on credit
- problem = people got into debt - if they couldn't keep up with payments, goods could be repossessed
- Republican governments and the economy
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