America became a whole different country after the First World War. The 1920's in America will always be remembered for the boom in economy.Most of the American people were living a great life and were able to afford luxury items, even though this didn't apply to every one, many believed that it was an exciting time of great opportunities.
The hours you would work in a week had dropped from 60 to 48 hours. For the first time, the Americans considered having fun just as important as work. Huge numbers of people had radios went to the movies and owned a car.The car and transport industry was the largest. The assembly line made mass production possible, and the industry boomed. "The Economic Boom".
America was now a very powerful country and most countries wanted to follow them.Henry Ford's assembly line in Detroit was the largest one in the country. After he made his first car(black Model-T), almost everybody in the United States had one. Three quarters of all families owned one. Using the assembly line, they made a lot more cars in one day than they used to.
Instead of paying for the cars with cash, people could now use credit to purchase items. Finance became a way of getting easy money. Since most families didn't have the money, they would buy the car with credit and pay off the money they owed later (finance).America was being paid back money from loans that it had lent other countries during the war; the banks now had lots of money to lend to people setting up a business or for people to buy on the margin.
Margins were where you would buy a section of stocks i.e. for £1000 but you have to pay £100 deposit now. So you would loan this money from the bank.
You would then wait for the shares to go up and cash your stocks out, pay your bank back and end up with the profit.Tax was kept low and businesses and companies were able to keep much of the profit to invest in new and efficient factories, which produced goods at a cheaper price and due to the Laissez Faire they could choose the wages quite freely.Advertising also played a part in the boom, these persuaded people to buy their items. Advertising took place on posters, radio, newspapers, magazines and the cinema.
Tariffs were also placed on bought goods bought in from objects on other countries so the buyer would prefer to only buy American goods.The last reason for the great Boom in the American industry was consumer confidence. The Americans were brave enough to invest in the market and set up their businesses. They also had the courage to buy goods on hire purchase.Many people benefited from the boom.
The general group were the average Americans who either bought on the margin or made money in other ways. Factory owners and companies made massive profits. The number of millionaires rose from 7,000 in 1914 to 35,000 in 1920.On the other hand some people did not benefit from the boom. These people were the unemployed, the main reason being that they had no money and could not buy goods. 8 million immigrants had crossed in hope of finding jobs.
When they arrived they had to live in cramped and appalling conditions and were treated unfairly and were not paid a suitable wage but his was due to Laissez Faire. They got the labour intensive jobs like cleaning the windows and scrubbing the floors. The black people also suffered from the boom because farmers had to give up their farms, as they made no money. The people who worked on the farms then in turn lost their jobs.
The blacks had to move to the cities to find jobs. They had to work long hours. The black Americans lived in the slum areas and lived in dreadful living conditions. They were often tarred and feathered or even hung. There were strict differences between the races.The last lot of people not to gain from the boom were the farmers.
The price for wheat had fallen. They would have to abandon their farmland and move to the rural areas. Over 600,000 farmers went bankrupt within 5 years. The quality of living conditions slightly improved but America was still far from perfect.
