Govt. Policies: High Tariffs: Fordney - McCumber
- Legal act passed in 1922
- The act raised tariffs to cover the difference between domestic and foreign production costs
- It became cheaper to buy domestic goods in almost all cases
- Foreign imports became more expensive. Even if they were cheaper to produce.
- This reduced the level of foreign trade.
1 of 7
Govt. Policies: High Tariffs: Tax Reductions
- Federal taxes were reduced significantly in 1924, 1926 and 1928
- This mainly benefitted the wealthy
- Mellon handed out Tax reductions of $3.5 billion to industrialists. However, Coolidge's Government still operated on a surplus.
- The Aim was to reduce national debt
- But this meant little to those who were still too poor to pay federal tax
2 of 7
Govt. Policies High Tariffs: Fewer Regulations
- There were fewer personell to enforce regulations
- this meant businesess could deal with their affairs as they saw fit.
- Laws such as Price Fixing were often ignored
- If the Government did decide to prosecute, offenders usually won on appeal.
- This Laissez - Faire attitude was a massive contribution to company profits
3 of 7
Govt. Policies: Foreign Policy
- President Coolidge avoided intervention in Foreign affairs wherever possible.
- This helped US investment abroad by removing ill feelings towards the US
- It also meant investors often favoured profit over more ethical conerns
4 of 7
- The Motor Industry was developed by the Model T Ford: It was sturdy and simple to build, so it was the perfect candidate for mass production.
- The impact was that new production techniques developed and the car became popular
- The growth in ownership of the Model T meant money no longer needed to be spent on advertising because it already marketed itself.
- Growth in electrical goods, i.e. the radio, meant a growth in advertising.
- Growth in electrical goods such as the vacuum cleaner allowed women who could not afford maids to do their own domestic chores.
5 of 7
New Business Methods
- Management science and Taylorism stated that more production work could be done in shorter periods of time than before.
- This helped the boom because it enabled supply to meet demand.
- Advertising was used to create this demand because it exploited people's need for a glamorous lifestyle.
6 of 7
- The availability of easy credit fuelled the boom because people could buy things "in good faith" (Buy now, pay later in small installments)
- This also included loans to buy stock (Call loans)
7 of 7