Causes of the boom years in the 1920s Essay Example for Free

Ca spends of the boom years in the 1920s EssayCauses of the boom yearsEmployers were workings fewer hours however were being paid more than. This therefore meant industrial goods produced were also increasing. Americans had more time for leisure and more m unrivaledy so electrical labour- frugality devices were being introduced becoming haveable by many people. Motor cars eased travel to and from work as well as for leisure pursuits. It was the easy age for cinema and sport attracted big crowds.Reasons for prosperity government policiesCalvin Coolidge stated the chief business of the American people is business. This was his government policy to let business give way as far as possible, allow of regulation. Andrew Mellon and him believed wealth filtered down naturally to all classes and to ensure increased living standards for all was to allow the well-to-do to continue make money to invest in industrial development which therefore meant more art opportunities, more wag e earners, more consumption etc. this policy was laissez-faire but the government intervened to brook business in 4 waysHigh tariffsFordney-McCumber Act 1922 raised tariffs to cover difference amidst domestic and distant labor costsCheaper to buy goods from USA than abroadTariff level foreign goods more expensive than USA even though produced cheaper in USAForeign trade trim = domestic demand for goods highTax reductionsGovernment thind federal valuatees 1924, 1926 and 1928 (benefited wealthy)Mellon handed come forward tax reductionsCoolidge operated on surplusAim reduced national debt, federal tax cuts = meant little to poor as not able to pay taxesFewer regulationsfederal official Trade Commission unable and unwilling to operate effectively causing businesses unhinderedForeign policiesCoolidge avoided involvement in foreign affairs due to cypher cutting an recognition that Americans didnt want to see troops getting caught up in foreign disputes. This meant that i nvestors would favour profit ever over ethical concernsTechnical advancesTechnical advances in industrial production made increases in quantity and variety of productsMotor vehicle industryThis industry grew dramatically in the 1920s. It was the largest for commodities. Previously cars had only been for the wealthy but Ford wanted the ordinary to be able to afford oneEffects of growth in car ownershipFord thought this would strengthen conventional American values but it led toRoad deaths 20,000 per yearBy 1929, motor industry industrious 7% of all workers and paid them 9% of all wagesClosure of Ford factor to deferral of 1927Loss of business by companies providing components to Ford real problems in economyRoad building time out of laissez-faire federal government expend on road building in 1920sFederal Highway Act 1921 responsibility for road building to central government and highways. Construction = 10,000 miles per year by 1929Chief Designer in Bureau of Public Roads 1936 roads built unfit for use because of amount of trafficMotor vehicles new service industries e.g. garages, petrol ranks etc.Improved emigration = new opportunities for industryElectrical consumer goodsNew technology = large scale development of labour saving devices as cheaper to produceSerious over production = problems in economyNew business methods addition of huge corporationsLarge corporations manufacturing business = could invest in and exploit raw materials of USA on massive scaleLarge corporations could dominate industry byOperating cartel (group of companies agreeing to fix output and prices to reduce competition and maximise profits). Although illegal, government accepted which involved exploitation of raw materials, retail outlets etc. nearly organisations were able to adapt to holding companies which resulted in firms competing against each otherManagement science change magnitude surface of businesses complex to manage = different management roles by different peo ple in administration festering of business schoolsManagement science, occupation for upper class = indication harder to start own companyIncreased productionAdvertising and salesmanship CinemaMillions of cinema-goers to copy lifestyle of stars meant potential for advertising was enormousRadioBegan with KDKA station which announced results in 1920 electionsRadios controlled by 2 companies with a vast audience constant need to create demandGrowth in industrial production needed a unbroken market in order to fuel the boom as people needed to be persuade to buy things frequently. An aspect of a campaign needed to be bought in which would differentiate between ones product and that of the competitors to promote unique selling point. Advertising techniques worked for many consumers.Easy source massive consumer boom was financed largely by easy credit facilities1929 $7 billion goods were sold on credit 75% of cars and half of major household appliancesAvailability of credit meant bor rowers took on debts which they could not repay set in foreign countriesHigh tariffs were used to protect US markets however the government also advance businessmen to develop extensive interests abroad in terms of raw materials that fuelled technological developments. US exported vast amounts of manufactured products.In the 1920s with almost full employment, low inflation, high tariffs keeping foreign goods out of USA, benevolent government policies and a consumer boom the prosperity would go on forever.