Term
| Causes of American Economic boom |
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Definition
(i) Impact of WW1:
-warring countries bought supplies from USA
-lead to growth of farming industry
-after the war many countries needed to borrow large amounts of money from USA
- lead to businesses investing in Europe
-war stimulated technological advances
(ii)Hire Purchase:
-chain stores
-buying from catalogues/mail order
-buy things on credit (buy even if dont have money)
(iii) Spread of Electricity:
-key component
-By 1929 electricity was in most city homes and 70% of Americans had electric lighting
(iv) Advertising:
-whole new industry
-sophisticated techniques eg colourful adverts / catch phrases
-magazine, radio + cinema advertising grew rapidly
(v) New methods of production:
-manufacturing industries made simpler and rougher goods
-machines + organisation took over - requires much less skilled labour
(vi) Mass production:
-product manufacturing in large quantities using a standardised mechanical process
- electric power to drive machinery |
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Term
| Policies of American Presidents |
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Definition
Harding:
gave important jobs to his friends
Veterans Bureau Scandal- Charles Forbes was in charge, $200m missing most of it into his pockets, attorney general covered it up for years
Fordney-McCumber Act placed high tariffs on European made goods to eliminate foreign competition and allow US Industry to grow
Coolidge:
laissez-faire, reduce government interference on private businesses to allow them to earn profit and wealth, american economy flourished due to this
Hoover:
laissez fare also, and'rugged individualism'- anyone could become rich by working hard for themselves with no help from the government, if hoover could do it anyone could "rags to riches", caused problems for poor people (no benefits) |
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Term
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Definition
-electricity led to development of a range of different domestic products eg cookers, hoovers etc
-could now buy using mail order catalogues
-led to greater demand for buildings of every kind
-development of new materials led to construction of new types of buildings eg sky scrapers
-skyscrapers eg empire state buildings =sign of American Capitalism and success |
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Term
| How did prosperity affect american society? |
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Definition
-development of electrical power to drive factory machinery enabled mass production techniques to be used in many industries
-made items cheaper so more people could buy them |
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Term
| influence of the car industry |
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Definition
-most important of boom industries
-revolutionised by Henry Ford
-Ford created first moving production line w/ conveyor belt
- workers performed one task
-Model T Ford most common car- mass produced
-everyone could own a car
-'any colour so long as its black'- cheap costs and durability of black paint |
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Term
| influence of the car industry on feeder industries |
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Definition
1) made it possible to live in the suburbs which boosted house building and stimulated growth of smaller businesses
2)led to boom in road construction- easier to distribute and sell goods. led to motels and restaurants being built en route.
3) chemical industry led the world in fertilisers and dyes/plastic and manmade fibres - could be used in car industry
4) created demand for steel glass wood plastic rubber leather petrol- creating over 5 million jobs
5) transformed buying habits - hire purchase, only way most families could afford a car |
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Term
| Improvements in infrastructure |
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Definition
-US transport experienced boom in 20s
- more roads as car sales boosted
-bus travel became popular
-aircraft flights appeared- Lindbergh used his fame to promote rapid development of US commercial aviation |
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Term
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Definition
-millions of families on low incomes- could not afford new cars + gadgets
-'rugged individualism' meant every man for himself so no government welfare for poor people |
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Term
| How did Farming not prosper |
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Definition
-loss of european market: US shipped millions of tonnes of grain to Europe during WW1 but the war bankrupted Europe so they couldnt affort US good any more
-tariffs put up to protect US industry made Europe even poorer- couldnt afford US produce
-competition from Canadian wheat growers
- over production- more and more land being farmed, improved fertilisers and machinery made agriculture very efficient producing too much wheat + grain + struggling to sell it
-about half of americans lived in rural areas and worked on farms/for businesses which sold goods to farmers- as income fell many rural communities became quite desperate
-millions of rural workers were forced off the land- unskilled workers migrated to cities where their labour was not needed and others became homeless |
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Term
| How did black americans not prosper |
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Definition
-had always done least skilled jobs in the rural areas
-as they lost their jobs 3/4 million joined unemployment
-worse in deep south (segregation)
-little better in north- forced to live in ghettos |
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Term
| How did immigrants not prosper |
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Definition
-source of cheap labour
-willing to take whatever work was offered
-received low wages - suffered prejudice and discrimination |
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Term
| How did older traditional industries not prosper |
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Definition
-low pay and dangerous working conditions led to major strikes in coal and steel industries
-over production in coal led to a fall in prices and unemployment
-in almost all strikes the government favoured the management over the workers |
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Term
| How did Trade Unions not prosper |
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Definition
-membership dropped
-'yellow dog contract' was to be signed requiring employees to swear they werent trade union members |
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Term
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Definition
a) over production in industry
-american market produces more goods than it could sell
-left companies with unsold goods
-manufactures did not cut back on production and continued to flood the market
b) overproduction in agriculture
-european markets recovered so they didnt need as much food
-farmers produced too much food and the US market didnt expand to take up the excess
-prices were cut and the increased competition put many farmers out of business
c) trade
-european countries had introduced import taxes in retaliation to US tariffs- reduced trade
-european countries couldnt repay their war debts to america
d) boom in land and property prices
-house prices had risen abruptly in the early 20s
-prices collapsed after 1926
-many americans now owned house worth less than they paid for them
e) falling demand in consumer goods
-many people bought goods on credit and were now in debt- could only overcome this by remaining in work
-many americans had remained poor during the boom so could never afford the new consumer goods
f) too many small banks
-didnt have enough money available for the people who rushed to withdraw their cash when the stock market crashed
-many banks collapsed leaving their customers with no money |
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Term
| short term causes end of prosperity |
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Definition
RISXE OF STOCK MARKET AND SPECULATION
-more and more americans were buying shares- prices went up
-shares stopped rising as rapidly
-people lost confidence in the companies and less people were buying shares
-share prices recovered as people began to speculate on the stock market- greed for profit sent share prices higher
-over 20million shareholders were still buying because
*the government didn't regulate the stock market
*growth of credit made it easy for people to buy goods and companies arranged for people to pay in instalments
*including buying shares on credit
-boom ended abruptly and dramatically in WALL STREET CRASH OCTOBER 1929 |
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Term
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Definition
Loss of confidence and panic selling:
-smaller investors panicked and rushed to sell their shares as prices fell
-led to complete collapse of share prices and many investors lost millions of dollars as they sold shares at any price
Black Thursday:
-busiest day of trading in shares
-led to big falls in share prices
-in an attempt to try and stop the panic banks intervened to buy stocks in companies and briefly share prices stabilised as some confidence returned
Crash of the Market:
-monday 28th October, became clear that banks were no longer buying shares + market took a huge fall
-massive crash when on BLACK TUESDAY people sold for whatever price they could get
-worst day ever on stock market- some people lost everything and many suicides were reported |
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