CHAPTER 11SECTION 1

A BOOMING ECONOMY

Vocabulary:

1.Henry Ford2.mass production3.assembly line4.consumer revolution5.installment buying6.bull market7.buying on margin8.Model T9.Scientific management

• IN THE DECADES THAT FOLLOWED WORLD WAR I THE AMERICAN ECONOMY EXPERIENCED TREMENDOUS GROWTH – USING REVOLUTIONARY MASS-PRODUCTION TECHNIQUES, AMERICAN WORKERS PRODUCED MORE GOODS IN LESS TIME THAN EVER BEFORE – HELPED CREAT THE MODERN CONSUMER ECONOMY

AUTOMOBILES

• MOST OF THE GROWTH WAS CAUSED BY THE AUTOMOBILE INDUSTRY – HENRY FORD INTRODUCED A SERIES OF METHODS AND IDEAS THAT REVOLUTIONIZED PRODUCTION, WAGES, WORKING CONDITIONS AND DAILY LIFE

• FORD DID NOT COME UP WITH THE IDEA OF MASS PRODUCTION – THE RAPID MANUFACTURE OF LARGE NUMBERS OF IDENTICAL PRODUCTS – HE EXPANDED IT

• EARLY ON ONLY WEALTHY CITY DWELLERS COULD AFFORD CARS – AUTOMOBILES WERE SEEN AS A SYMBOL OF THE CLASS DIVISIONS IN THE COUNTRY

• RANSOM OLDS INTRODUCED A LESS EXPENSIVE CAR IN 1901 – THE OLDSMOBILE BUT HENRY FORD INTRODUCED THE MODEL T – A RELIABLE CAR THAT AVERAGE AMERICANS COULD AFFORD – FIRST ONE SOLD FOR $850

• FORD OPENED A PLANT IN DETROIT, MI AND HIRED SCIENTIFIC MANAGEMENT EXPERTS TO IMPROVE HIS MASS-PRODUCTION TECHNIQUES

• SCIENTIFIC MANAGEMENT WAS A METHOD OF IMPROVING EFFICIENCY WHERE EXPERTS LOOKED AT EVERY STEP OF PRODUCTION TO FIND WAYS TO REDUCE TIME, EFFORT AND EXPENSE

• FORD PUT HIS CARS ON A MOVING ASSEMBLY LINE – WHERE AT EACH STEP A WORKER ADDED SOMETHING TO CONSTRUCT THE AUTOMOBILE – REDUCED TIME TO MAKING THE MODEL T TO ONLY 90 MINUTES

• THE ASSEMBLY LINE ALLOWED FORD TO DROP THE SALES PRICE OF A MODEL T – BY 1927 IT ONLY COST $290

THE MODEL T WAS SLOW AND ONLY AVAILABLE IN BLACK – IT WAS THE FIRST CAR ORDINARY PEOPLE COULD AFFORD – BY 1927 56% OF AMERICAN FAMILIES OWNED AN AUTOMOBILE

FORD AND HIS WORKERS

• HE MORE THAN DOUBLED THEIR WGES FROM $2.35 TO $5.00 PER DAY AND REDUCED THEIR WORKDAY FROM 9 TO 8 HOURS

• FORD BECAME THE FIRST INDUSTRIALIST TO GIVE HIS WORKERS SATURDAY AND SUNDAY OFF – HE REALIZED THAT IF WORKERS HAD MORE MONEY AND MORE TIME OFF THEY MIGHT BECOME POTENTIAL CUSTOMERS

• FORD ENGLISH SCHOOL*******

Established in 1914, the Ford English School taught the company’s immigrant workers more than just how to

speak English. It taught them about American culture and history and instilled the importance of such virtues as thriftiness, cleanliness, good manners, and timeliness.

Pictured below are a classroom at the Ford English School (top) and the school’s graduating class emerging from the

"Melting Pot" (bottom), a symbol of their having put aside their ethnic identity and become good Americans,

on July 4, 1917.

Ford English School

Impact of the AutomobileBy the 1920’s, the growing “car culture” was changing the nation in deeper ways than even Ford might have imagined.

Automobiles encouraged the growth of related industries-especially the oil industry

The gas station and gas fumes became a permanent part of the US landscape

Impact of the AutomobileThe Highway System

By 1925, states had built hundreds of highways, and the federal government organized them into a numbered system.

One of the first federal highways was Route 66, which ran from Illinois to California.

Impact of the AutomobileAdvertising

Ads stressed what cars gave their owners- speed, status, and a new sense of freedom.

Impact of the Automobile

Vacation Industry

Americans used their new cars and expanded leisure time to travel.

Motels and motors camps sprung up all over the nation.

Automobile Changes AmericaTHE AUTO INDUSTRY STIMULATED GROWTH IN OTHER INDUSTRIES RELATING TO CAR MANUFACTURING:1. STEEL-about one-seventh of all output was used to make cars2. GLASS3. RUBBER4. ASPHALT5. WOOD6. GASOLINE7. INSURANCE8. ROAD CONSTRUCTION – BOOMED WHEN THE FEDERAL GOVERNMENT INRODUCED THE SYSTEM OF NUMBERED HIGHWAYS IN 1926

Automobile Changes America• THE MILLIONS OF CARS ON THE ROAD LED TO THE NEED FOR OTHER INDUSTRIES: • GAS STATIONS• DINERS• MOTOR HOTELS – LATER SHORTENED TO MOTELS• THESE CONTRIBUTED TO NATIONAL PROSPERITY• THE AUTOMOBILE HURT RAILROADS AND TROLLEYS – BIG DECLINE IN USE – PEOPLE COULD TRAVEL ON THEIR OWN TIME INSTEAD OF ON A SCHEDULE• AUTOMOBILES LED TO CHANGING RESIDENTIAL PATTERNS – PEOPLE COULD LIVE FURTHER AWAY FROM THEIR JOB – LED TO THE DEVELOPMENT OF SUBURBAN COMMUNITIES

Economy

• THE 1920’s SAW A CONSUMER REVOLUTION – IN WHICH A FLOOD OF NEW, AFFORDABLE GOODS BECAME AVAILABLE TO THE PUBLIC – SUPPORTED BY ELECTRICAL POWER – ELECTRIC WASHING MACHINES, VACUUM CLEANERS AND IRONS – ALSO RADIO AND REFRIGERATORS

Economy• ADVERTISING HELPED CREATE THE CONSUMER REVOLUTION

– MAGAZINE AND NEWSPAPER ADS OFTEN FOCUSED ON THE DESIRES AND FEARS OF AMERICANS MORE THAN ON WHAT PEOPLE REALLY NEEDED – CONVINCED PEOPLE THEY COULD BE WHAT THEY WANTED TO BE IF THEY WOULD BUY THE RIGHT PRODUCT

Economy• NEW WAYS OF BUYING HELPED TO CREATE THE CONSUMER REVOLUTION – PEOPLE DID NOT ALWAYS HAVE THE MONEY TO BUY SOMETHING COULD BUY ON CREDIT – INSTALLMENT PLAN – ALFRED P. SLOAN – ALLOWED PEOPLE TO MAKE A DOWN PAYMENT AND THEN PAY OFF THE REST IN REGULAR MONTHLY PAYMENTS

BULL MARKET• DURING THE 1920’S THE STOCK MARKET ENJOYED THE BULL MARKET – A PERIOD OF RISING STOCK PRICES – MORE PEOPLE PUT THEIR MONEY IN THE STOCK MARKET TO GET RICH QUICK• AS THE MARKET ROSE PEOPLE BEGAN BUYING ON MARGIN – A BUYER PAID AS LITTLE AS 10 PERCENT OF THE STOCK – ONLY WORKED AS LONG AS PRICES REMAINED HIGH – HAD TO PAY OFF DEBT REGARDLESS OF PRICE UPFRONT TO A BROKER AND THEN PAYED FOR THE REST OF THE STOCK OVER A PERIOD OF MONTHS

Cities,Suburbs, and Country• NOT ALL PARTS OF THE NATION WERE PROSPEROUS – RURAL AMERICANS FACES HARD TIMES

• PEOPLE BEGAN TO GO TO THE BIG CITIES – AFRICAN AMERICANS MOVED NORTH DURING THE GREAT MIGRATION – MEXICAN AMERICANS MOVED TO SOUTHWESTERN CITIES

Cities, Suburbs, and Country

• CITIES BEGAN TO TAKE ON A DIFFERENT LOOK BECAUSE OF ALL THE PEOPLE MOVING THERE – BEGAN BUILDING SKYSCRAPERS – EMPIRE STATE BUILDING IN NEW YORK – FINISHED IN 1931 – CHRYSLER BUILDING 1928 – WORLD’S TALLEST BUILDING DURING THIS TIME (PAGE 328)

Cities, Suburbs, and Country• BECAUSE OF TRANSPORTATION SUBURBS BEGAN TO GROW – DRAINED PEOPLE AND RESOURCES FROM THE CITIES – SUBURBS CATERED TO MIDDLE AND UPPER CLASS CITIZENS – MOST TENDED TO BE CONSERVATIVE AND REPUBLICAN

• AMERICA’S WEALTH WAS UNEQUALLY DISTRIBUTED – INDUSTRIAL WAGES ROSE SLOWLY AND FARMERS INCOMES DECLINED (PAGE 329)