The Boom and Depression in the USA
Presidents of the USA during the Boom and Depression Period
- Woodrow Wilson
- Warren G Harding
- Calvin Coolidge
- Hebert Hoover
- Franklin Delano Roosevelt
A boom is a period where the majority of a country’s population enjoys a period of marked prosperity and there is a general rise in the general population’s economic well-being.
Detailed Characteristics of the USA’s Boom
- Started in the 1920s and ended in 1929.
- Advanced technological progress such as the rise in the use of motor cars for example there were 26 million registered cars in the US by 1929.
- Increased consumer demand.
- An increase in the entertainment industry.
- A lot of people now owned radios, the number rose from just 60 000 to almost 10 million radio sets and there were 500 licensed radio stations by 1922.
- There was an increase in the popularity of Jazz music during the period.
- Exciting comedies were made as the film industry grew giving rise to celebrities like Charlie Chaplin.
- Sporting activities like tennis (the U.S Open and Davis Cup), golf and American Football became popular past times.
- There was a profound change in people’s lives as they now used technologies like cars,fridges and Strite’s toasters.
- The rate of unemployment was very low.
- Worker’s wages rose by 12% and most people could now afford to buy luxurious goods.
- The country’s GDP increased significantly.
- There was an increase in the number of people who used air travel.
- Emancipation of women and rise of feminist movements as more and more middle class women started wearing mini-skirts, make up and shorts and smoked in public.
- Rise of support industries for example rubber for car tires, steel, coal and agriculture meant more prosperity via the multiplier effect.
- Firms learnt and developed ways to raise money on stock exchanges the most famous of which was the New York Stock exchange on Wall Street.
- The country followed a policy of isolationism under Coolidge and Harding.
- The rise in mass production under companies like the Ford Motor company.
- People were now allowed to make purchases under Hire Purchase.
- Billions of dollars spent to build National parks and National Highways.
- Not all people benefited from the Boom for example black people still suffered from political and social oppression.
- Agriculture produce suffered from low market prices.
Causes of the Boom
Isolationism-The US joined the First World War much later and did not suffer directly from the impact of the war from say shelling and bombings which destroyed much of Europe’s infrastructure.
-While most countries channeled their resources towards war and reconstruction the US was developing and expanding itself.
-The US also made loan payments to European countries to put towards their war efforts which they had to pay back and the profits from these were used to expand America further resulting in the development of the American Banking system the results of which include the fact that the US Dollar is the de facto world medium of exchange world wide.
-US governments increased taxes and tariffs on foreign goods thus allowing the expansion of local companies.
Mass production-Cars and other household goods like radios, fridges and toasters were produced on assembly lines allowing for their mass production leading to prosperous industries and consumers’ demands being easily met.
Technological improvements-this was an era of great innovation when a lot of household goods were invented, patented and commercially sold across America. For example the automatic toaster was invented and successfully sold by General Electric during this period.
-Some of these machines and ideas led to mass production thus fueling the circle of prosperity.
Hire Purchase and Credit Schemes-people were able to afford more goods further increasing demand and fueling the production circle.
Shares- businesses were able to raise a lot of needed capital using shares and other igneous means on the Stock exchanges thus contributing towards the increase in GDP.
The building of Communication infrastructure like roads and railways-America constructed intercontinental railway lines in interior of the mainland.
-This means goods could now easily reach the markets both inside and outside America quickly and cheaply.