The USA in the 1920s

mass production

The car industry

cycle of prosperity

government policy

credit facilites


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Mass Production

Mass production boosted number of goods made.

Huge new factories were built.

In the factories, assembly lines were set up.

The parts of the product travelled along the lines so that a worker did the same small job on the product.

This process was quick and straightforward so production rose dramatically

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America's growing industry.

One of the first to use mass production was the car industry.

In 1911 the first Model T Ford was produced by mass production. (One car was being made every ten seconds).

This allowed prices to be low - a Model T Ford could be purchased for $295.

Increase in car manufacture/ownership allowed other industries to grow - steel, rubber, glass, leather and oil were all in greater demand.

Consumer goods were also mass produced - radio sets, telephones, refridgerators, vacuum cleaners and ovens.

These new gadgets were attractive to the American public and sales rocketed.

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Cycle of prosperity

This growth created a cycle of prosperity.

The increased production of consumer goods created increased employment. This meant people had more money to spend on luxurys, especially as prices were falling.

This in turn created an increased demand for goods and encouraged further increased production.

so the cycle went on.

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Government Policy

other factors helped to maintain the boom.

The Republican governments of the 20s encouraged the growth of business by a policy of non-inteference and did not place any controls on industry.

They also lowered taxes on people's incomes and on company profits.

This gave people more money to spend on consumer goods and companies more money to invest in new factories and equipment.

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Credit facilites

The ability to buy consumer goods was helped by the introduction of hire purchase (buying on credit).

This allowed poepl who did not have enough cash to pay the full cost of a product to obtain it by paying for it in installments.

Mail order also increased the market for goods beyond towns and cities into the most remote country areas - (allowed them to modernize).

Advertisments appeared in magazines, newspapers, in the cinema and on billboards.

The urged the public to "keep up with the Jones'" - to not be left behind in the new technology surge. And played to their social desires to seem weathlier than their neighbours.

The 1920s was a time of great prosperity and technological advance.

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Throughout the 1920s there was a feeling of great confidence among Americans, which encouraged them to buy goods on credit or by cash.

It encouraged them to invest some of their wages in companies by buying shares. Some borrowed money to buy shares, waited for the price to go up, sold the shares to pay back the credit and kept the rest as profit.

Many made vast sums by 'playing the stock market'.

It seemed that the good times were here to stay.

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