The Economic Boom in America in the 1920's
The decade of the 1920s, or as it was called by its contemporaries,
"The New Era," was marked by prosperity and new opportunity in the
aftermath of World War I. The war began in Europe in 1914, and the
United States entered the fray in 1917. A significant reason for
United States involvement in the war was the nation's economic links
to the Allied Powers, and especially to Great Britain. America had
given loans to Great Britain totalling over $2.3 billion. As a result,
they feared a British defeat that would severely cripple them.
Although the allies eventually won the war, there were problems as
well. The transition from a war-time to a peace-time economy caused
economic dislocation for industrial workers, loss of income for
farmers, and renewed racism and nativism against African-Americans and
foreign immigrants. Despite this, America had emerged from World War I
with a strong economy. America itself had not been attacked and as it
had not joined the war until 1917, it did not have to rebuild itself
like the European nations did.
Although distanced from the main fighting, America came out of the war
a completely different country. The twenties was a very unusual time
period in American History. The twenties were a time of fun and
partying. There are many reasons why it was called the Roaring
Twenties. Most of the American people were living a great life and
were able to afford luxury items, even though this didn't apply to
every one many believed that it was an excellent and exciting time of
In the twenties, industry took a very big step. It nearly doubled. Not
only did industry grow so did science, fads, laws, beliefs, arts,
social lives, sports and the various different news from around the
globe. At this time women were needed in society and men began to
accept them. The car and train industry was the largest industry there
was. The assembly line made mass production possible, and the industry
boomed. America was now a very powerful envy of many countries.
America had high production and low unemployment
Henry Ford's assembly line in Detroit was the largest one in the
There were many causes of the economic boom, mass production being
just one of them. Factories around the USA could use electricity and
set up assembly lines and make objects quickly. The cars were made
identical to make them easier to make and so they are cheaper.
America was being paid back loans that it had lent other countries
during the war; on top of this they were making interest. The banks
now had lots of money to lend to people setting up a business or for
people to buy on the margin.
Taxation was kept low and businesses and companies able to keep much
of the profit to invest in new efficient factories that...