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To what extent was American prosperity in the years 1900 to 1929 ‘superficial and fragile’?
- Module
- US History
- Institution
- AQA
An essay plan for the US Economy from 1900 to 1929, includes counterpoints for each point.
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To what extent was American prosperity in the years 1900 to 1929 ‘superficial andfragile’?
FOR:
Para 1 - Much economic growth was due to the stock market and hire purchase credit
schemes.
➢ Values of stocks and shares rose readily.
➢ The amount of buying and selling shares grew substantially.
➢ The USA began to speculate.
○ 1926 - 451m shares
○ 1929 - 1.1bn shares
➢ Up to 25m Americans involved in the stock market.
➢ Easy credit - invested and many lost money.
➢ Provided opportunities for confidence, tricksters, and crooks.
○ E.g. Charles Ponzi conned thousands of unsuspecting people into investing in
his ventures. The Florida Land Boom - began to sell parcels of land.
Hurricanes in 1926 resulted in the Florida Land Boom collapsing.
➢ Lack of regulation in the stock market encouraged more and more speculation.
○ 1925 - stock market value at $27 bn.
○ 1929 - stock market value at $89 bn.
○ 1929 - 20m shareholders in the USA.
Para 2 - Availability of easy credit
➢ Growth of credit made it easier for people to buy goods.
➢ ½ the goods sold in the 1920s were paid for by hire purchase.
➢ Easy credit policies were encouraged by the Federal Reserve Board.
➢ 75% if purchase prices were shared.
➢ Growth of credit made it easier for people to buy goods even though they did not
have the cash for them.
➢ Firms arranged for customers to pay on hire purchase.
Para 3 - There was falling demand for consumer goods.
➢ Construction boom came to an end in 1928 slowing down spending and investment.
➢ Great boom in car ownership slowed sharply and industrial production fell.
➢ Fall in demand due to unequal distribution of wealth.
➢ Almost all Americans had an income of less than $2000 a year (the minimum needed
to survive).
➢ The US had high tariffs and couldn't sell surplus products to other countries as
Europe owed the US money.
AGAINST:
Para 4 - consumerism grew rapidly for reasons other than just hire credit.
➢ Increased demand
➢ 1927 - 2/3rds of US homes had electricity.
➢ The amount of oil used doubled and gas quadrupled.
➢ Growth in female employment.
○ Increased need for labour-saving devices.
➢ Various advertising techniques developed rapidly during the 1920s.
➢ Companies began to employ psychologists to design campaigns and target specific
groups.
○ 1929 - companies spending $3bn annually on advertising (5x more than
1914)
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