Causes of the boom years in the 1920s Essay

Causes of the shell yearsEmployers were works fewer hours however were being paid more. This therefore meant industrial goods produced were excessively increasing. Americans had more time for leisure and more notes so electrical labour- preservation devices were being introduced becoming afford fit by umteen people. tug cars eased travel to and from work as well as for leisure pursuits. It was the golden age for cinema and sport attracted vast crowds.Reasons for prosperity regimen policiesCalvin Coolidge stated the chief business of the American people is business. This was his regimen policy to let business die hard as far as possible, free of regulation. Andrew Mellon and him believed wealth filtered down naturally to all classes and to ensure increase living standards for all was to allow the rich to continue make gold to initiate in industrial development which therefore meant more suppose opportunities, more wage earners, more consumption etc. this policy was capita list notwithstanding the government intervened to support business in 4 ship canalHigh tariffs crossroadney-McCumber Act 1922 raised tariffs to cover difference amongst municipal and abroad production costsCheaper to buy goods from USA than abroad tax level foreign goods more expensive than USA even though produced cheaper in USAForeign trade reduced = domestic invite for goods highTax reductionsGovernment reduced federal taxes 1924, 1926 and 1928 (benefited wealthy)Mellon handed out(p) tax reductionsCoolidge operated on surplusAim reduced national debt, federal tax cuts = meant little to poor as not able to profit taxesFewer regulationsFederal Trade Commission unable and unwilling to operate effectively causing businesses unhinderedForeign policiesCoolidge avoided involvement in foreign affairs due to budget cutting an recognition that Americans didnt insufficiency to see troops getting caught up in foreign disputes. This meant that investors would favour profit ev er 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 whole been for the wealthy but Ford wanted the ordinary to be able to afford oneEffects of growth in car possessionFord thought this would strengthen traditional American values but it led toRoad deaths 20,000 per yearBy 1929, motor industry apply 7% of all workers and paid them 9% of all wages diaphragm of Ford factor to recession of 1927Loss of business by companies providing components to Ford real problems in sparingRoad constructBreaking of capitalistic 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 decorator in Bureau of Public Roads 1936 roads built uncollectible for use because of amount of trafficMotor vehicles new service industries e.g. garages, flatulence stations etc.Improved transportation = new opportunities for industryelectric consumer goodsNew technology = large home base development of labour saving devices as cheaper to produceSerious over production = problems in economyNew business methodsGrowth of huge corporationsLarge corporations manufacturing business = could invest in and exploit raw materials of USA on vast scaleLarge corporations could dominate industry byOperating cartel (group of companies agreeing to puzzle output and prices to reduce competition and maximise profits). Although illegal, government accepted which convoluted exploitation of raw materials, retail outlets etc.Some organisations were able to align to holding companies which resulted in firms competing against each otherManagement science change magnitude size of businesses complex to manage = contrary management roles by different people in admin istrationGrowth of business schoolsManagement science, problem for upper class = indication harder to start own companyincrease production advert and salesmanship CinemaMillions of cinema-goers to copy lifestyle of stars meant potential for publicise was enormousRadioBegan with KDKA station which announced results in 1920 electionsRadios controlled by 2 companies with a vast audienceConstant guide to create demandGrowth in industrial production mandatory a continuous market in order to fuel the boom as people needed to be convinced to buy things frequently. An flavour 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 character referenceMassive 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 borrower s took on debts which they could not repayInfluence in foreign countriesHigh tariffs were utilise to protect US markets however the government also encouraged business community 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 beneficial employment, low inflation, high tariffs keeping foreign goods out of USA, benevolent government policies and a consumer boom the prosperity would go on forever.