Describe the main aspects of the Economic Boom in the 1920s

        The changes brought in the United States in the 1920s were far-reaching and enduring. By the time the Boom ended, the work week had dropped from 60 to 48 hours. For the first time, the masses considered play as important as work – the weekend family outing and vacation had become things workers expected as a matter of course. New industries prospered and produced high quality goods, rapidly and cheaply. Workers' salaries increased and the average standard of living increased as well.

            The American economy was in a powerful position at the end of World War I. Countries that could not buy weapons, ammunition and food from Europe were forced to buy American goods during and after the war. US investors and bankers did well out of the war, so they had money to invest in new American industries. Furthermore, while the Europeans were busy fighting, the United States took over many of their markets, like the chemical industry for instance, in which Germany had been the former world leader.

Republican policies, such as isolationism and laissez-faire, were an additional help to the creation of the economic boom. Due to the isolationism, tariffs were set on imports in order to protect US industry from competition. However, it had the negative effect of damaging the American industry internationally, since it could not sell abroad because other countries had put their own taxes on US imports in response to the US Fordney-McCumber Tariff. Furthermore, restrictions on American business set by former President Woodrow Wilson were removed, leaving it an immense amount of freedom. Thanks to pressure from President Coolidge and the business world, the Federal Reserve Bank kept the rediscount rate low. The federal government favoured the new industries as opposed to agriculture. One of these new business was the automotive industry, which became the driving force behind many other booming industries in the 1920's. Growing demand for cars led to growth of many allied industries such as petrol, glass, tyres and road building. Powerful trusts between began to form. Greater use of electricity and mass-production techniques helped American industries to make cheap, high quality goods whilst increasing the workers' wages. Four million new jobs had been created only in the car industry. Henry Ford’s moving assembly line produced his T-model cars quickly and efficiently, thus causing its price to diminish. By 1928, with over 21 million cars on the road, there was roughly one car for every six Americans. The growth of income meant people could buy more consumer goods such as cars, radios, watches, vacuum cleaners and washing machines. In 1920, practically nobody owned a radio. By the decade's end, virtually everyone owned one – and participated in a mass form of entertainment never before experienced. Additionally, selling millions of goods to a mass market needed new techniques of advertising. Posters and magazines all told the US public, in glowing terms, about the new goods on offer. Radio commercials bought the desire for new goods into every home. Shopping habits changed as chain stores expanded. Even President Coolidge believed in the importance of advertisement:

“Advertising makes new thoughts, new desires, new actions. It is the most powerful influence in adapting and changing the habits and way of life… of a whole nation.”

A new era had begun.

            It was in the huge, bustling cities of the USA that the Twenties seemed to roar the most. Just before 1920 the number of US citizens living in towns and cities exceeded the number living in rural areas for the first time in the history of the USA. Cities became bigger as more and more people moved out to the new suburbs. With urbanisation came the need to build more apartment buildings, factories, offices and stores. From 1919 to 1928 the construction industry grew by nearly 50%. Businesses began to set themselves up in the cities. However, people also began to understand the idea of leisure, and after a hard day's work they needed fun and relaxation. As a matter of fact, people, having more money from their higher wages, began to spend on entertainment. The film industry grew, first with the silent movies and, after 1927, with the 'talking pictures'. Hollywood was the capital of the film industry, creating film stars like Charlie Chaplin and Rudolph Valentino. Walt Disney’s cartoon characters, Mickey Mouse and Donald Duck delighted adults and children. Millions of people went to the cinema every week. The pace of modern life lead to excessive, irrational pursuits and short-lived fads. Speed and daring captivated everyone. Aviators were treated like royalty by heads of state every time they flew across continents or large bodies of water or set new altitude records. People were fascinated with the death-defying adventures of North Pole explorer Richard E. Byrd, flyer Charles Lindbergh, and desert traveller T.E. Lawrence.

            Most Americans thought that the boom would go on for ever. The Wall street stock market boomed as millions of Americans bought shares in profitable companies hoping to ‘make a quick buck’. Businesses prospered so shares went skyrocketing. For instance, some shares of a radio company increased throughout 1928 from $ 94 to $ 505 in a matter of months. Mass speculation went throughout the late 1920's. Low interest rates allowed people to borrow lots of money easily.  Often they bought shares on credit, as they did when buying other goods. People were gaining money not only through their normal work, but also though speculation in the stock exchange.

            However, not everyone benefited by the Economic Boom. Farmers, for example, did not share in the prosperity. Food prices feel because farmers produced too much food. Food exports fell because European farmers also produced more food and therefore Europe didn't need any imports from the USA. As a result farm workers’ wages fell and they had to fire workers. Naturally, the first to be sacked by the farmers were the African-American Negroes. This ethnic group was probably the worst off during the roaring twenties since in addition to the lack of prosperity, they were also racially discriminated. 'Jim Crow' laws were passed to separate the blacks from the white people, and gave them only the possibility of finding an unskilled, low paid job. Racist groups such as the Ku Klux Klan also formed. They continuously tormented and tortured the black minorities in the South. They carried out lynchings of black people as well as other criminal acts. However, they were never punished for their atrocious crimes. Other people to suffer during the Economic Boom were the immigrants coming from Europe. The United States had always been seen as a multi-cultural country, however, in the 1920's, things began to change. Being a capitalist country, the USA was against Communism and other revolutionist ideas such as anarchy. During this period of time, many Americans began to worry about the possibility of these ideologies spreading through immigration. This triggered what was to be known as the Red Scare. Americans suspected that immigrant Germans and Russians were bringing their Bolshevik ideas in the United States and consequently the Government decided to pass a quota system which would regulate the immigration of these 'threatful' minority groups.

            Moreover, the shipbuilding, coal and textile industries did not share in the boom either. Shipbuilding was hit by the fall in demand, because of the end of the war as well as in the decrease of immigration. Japan and India developed their own textile industries, and introduced taxes on American exports. Oil and electricity were more efficient than coal as fuel. Workers and their families affected by these problems began to cut their spending and so, by 1929, there was a reduce in demand in almost all fields of production, especially consumer goods. Profits made by businesses began to fall and unemployment began to rise. Nobody could have imagined what was about to hit the world.

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