Consequences of the Economic Boom in America in the 1920’s
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.
Video Clip: Roaring Twenties
With more money to spend people invested on the stock market.
President Hoover’s aim: “a chicken in every pot and two cars in every garage”.
Many Americans were confident about the economy.
Share prices were going up fast.
People were getting richer.
Stock Market Manipulation.
American industry booms, price of shares rises.
Investors sell their shares at higher prices and make huge profits.