Unit 5 - The Business of America

President Calvin Coolidge

• Pro-business• “The chief business of the American people is

business”• Republican policies

– Favored low taxes– High profits for businesses– Gave businesses more credit to expand– Low govt. influence– Private enterprise should flourish– High tariffs– Reduced income taxes – more to spend

Impact of the Automobile

• Henry Ford – Created automobile assembly line

• Allowed for mass production of cars• Cheap cars were affordable • More people could buy them

– Introduced $5 work day

Impact of the Automobile

• Impact of the automobile– Construction of paved roads– Houses with garage or carport and driveway– Growth of car-associated businesses

• Gas station• Motels

– Increased mobility• Liberated rural families• Vacations in far away places

– Urban Sprawl• Spreading of cities• Cars can be used to commute to city center

America’s standard of living increases

• 1920s – time of economic prosperity– Americans owned 40% of world’s wealth– Average income increased 35%– Industrial production rose tremendously– National income increased over 70%

• Airplanes– Commercial airlines– Carried cargo and passengers

• Electrical conveniences– Electricity can be transmitted long distances– Electrical appliances

• Dishwasher, washing machine, vacuum cleaner

– Freed housewives from household work

• Advertising– Aimed at people’s desires for youth, beauty– Brand names – Luxury goods viewed as necessities

Superficial Prosperity

• Increased production– Productivity increases – more goods

produced– Chain stores sprouted selling goods– Incomes up

Superficial Prosperity

• Problems– Growing income gap between workers and

managers– Not all industries prospered

• Iron and railroads

– Farm production increased leading to lower prices

– People needed to keep buying

• Buying Goods on credit– Installment plan

• Goods purchased with little money up front• Allowed people to buy goods and pay over time• Banks provided low interest rates• Allowed Americans to keep buying