Economic Boom Revision Notes
How Did the First World War impact upon America?
WW1 Was GOOD for America
WW1 Was BAD for America
Greater job opportunities for African Americans.
Racial Tensions were increased.
Agricultural Boom with supplying Europe (it’s allies) with foodstuffs
The Spanish flu arrived in the spring of 1918 and lasted a year. Throughout the world 22 million people died and in the USA 500,000 people died of it.
Industry Boomed due to wartime productions- making uniforms, munitions, arms etc bringing in money.
Red Scare- Americans were scared that immigrants from Russia and surrounding countries would bring those new ideas with them i.e. communism, anarchism.
America was lending money to the Allies and became known as “Banker to the World”. After the war America continued to make money as countries paid back these loans with interest.
4 million conscripted, 48,000 deaths, 204,000 wounded.
Before the War, Germany had had one of the world’s most successful chemical industries however the war stopped it in its tracks and by the end of the war, the USA had far outstripped Germany in the supply of chemical products.
America did not suffer financial or physical damage as Europe did.
On What Factors Was The Economic Boom Based On?
1. The USA’s wealth – rich in raw materials such as iron and fertile lands, hard working, ambitious population with a strong culture of self-help, changed from being rural and agricultural to urban and industrial.
2. New Industries – total production of American industry increased by 50% during 1920s, demand for consumer goods like new electrical goods e.g. washing machine and radios, the chemical industry created new materials such as rayon, and the motor car industry flourished e.g. Ford, General Motors, Chrysler.
3. Rising wages and stable prices – people could afford to buy new goods because their wages increased by 25% and prices were steady, some even deceased due to the introduction of the ASSEMBLY LINE.
4. Government policies – Republican government followed policies that stimulated the economy. Andrew Mellon, Secretary of the Treasury, believed government should play as little part in economic life as possible. Taxes were kept low so that people and companies would have more money to invest and tariffs on foreign imports (the Fordney-McCumber Tariff of 1922) were higher than ever before protecting American businesses from foreign competition.
5. Hire purchase – the consumer boom was encouraged by the availability of credit, enabled people to buy goods with small deposits and then pay off the rest weekly or monthly instalments. Mail-order catalogues e.g. Sears-Roebuck also became very popular.
6. Weak Unions – Republicans were hostile to trade unions this allowed employers to keep wages low and hours of work long.
7. First World War- America made money by selling goods to Europe and loaning money to them during the war. For example, food and weapons were sold to America and this created many jobs in America and…