The Boom

The period from 1920-29 is often called the 'Roaring Twenties'  because it was a time of noise, lively action and economic prosperity.  The First World War had been good for American business.  Factory production had risen sharply to meet the needs of the war.  America had been able to capture markets that used to buy from Europe.  Once the war was over these countries continued to buy American goods.

The Republican governments of Presidents Harding, Coolidge and Hoover, tried to help American businesses by increasing taxes on foreign goods coming into the USA. This was achieved by passing a new law called the Fordney - McCumber Tariff Act in 1922.  These new import taxes were called 'Tariffs' and made goods that were made outside of the USA more expensive to buy.  This in turn encouraged Americans to buy goods made in the USA.  This led to a Boom or an increase in the amount of goods being made and sold by American businesses. 

Source A: The Cycle of Prosperity

 

 

 

 

 

 

 

 

 

 

 

 

Things seemed to be going well for the USA.  There was hardly any unemployment, so people had money to spend in the shops.  There were new and attractive things to buy.  Mass production meant radios, washing machines, vacuum cleaners, fridges  and cars, which only the very rich could have bought in the past, could now be made more cheaply.  Hire purchase meant that people could get these things straight away and pay for them in the following months or years.  Advertising on the radio and at the cinema tried to get people to buy these new cheaper goods.  As so many goods were being bought more people were employed to make them. These workers in turn had their wages to spend, so they bought more things, so more workers were needed to make the things that they bought.  There seemed to be no reason why this cycle of prosperity should stop.

Text by Mr Huggins.