EB of the 20s

Installment Buying

Mass Production

Mass advertising

Popular Entertainment

New Products

Economic Boom of the 1920s: An Era of Prosperity

Mass Production

Assembly Line

Model T

Ford, the Assembly Line, and the Model T Mass production, or large-scale manufacturing done with machinery, increased productivity and reduced costs of many products. Workers made more and the goods they bought cost less. In 1913, Henry Ford innovated the automotive industry when he installed the first moving assembly line at a plant in Highland Park, Michigan. The moving assembly line divided operations into simple tasks and cut unnecessary motion to a minimum, thus making production more efficient. By the following year, workers were building an automobile every 93 minutes. By 1925, a Ford car was rolling off the line every 10 seconds. Ford’s assembly line product, the Model T, demonstrated the economic concept of elasticity, or how sensitive product demand is to price. In 1908, the Model T’s first year, the car sold for $850. In 1914 mass production reduced the price to $490. This reduction in price made owning a car possible for more people!

There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible paying the highest wages possible." —Henry Ford, quoted in Mass Production, the Stock Market Crash, and the Great Depression, 1996

Summary: Mass production is the method of producing goods in large quantities at a low cost per unit.

Installment Buying

Installment Plans The installment plan enabled people to buy goods over an extended period of time, without having to put down much money at the time of purchase. Credit had been available before the 1920s, but most Americans had considered debt shameful. Now attitudes toward debt started changing. Income taxes have decreased and people began believing in their ability to pay their debts over time, so they started spending money on all the new luxury items of the time period. Many listened to the sales pitch “Buy now and pay in easy installments,” and began to accumulate debt. Americans bought 75 percent of their radios and 60 percent of their automobiles on the installment plan. Some started buying on credit at a rate exceeding their income. With more people willing to buy products using installment plans, the demand for items such as cars, radios, and appliances increased.

Summary: Installment plans allowed people to purchase an expensive item by promising to pay for it monthly, similar to credit cards.

advertisements for Firestone tires, cars, appliances, land, phonograph

Let's have a quick discussion about debt (a favorite topic among students). Using the graph, what happened to consumer debt during the 1920s? Why is consumer debt good? Debt is normally associated with creation. For example, businesses take out loans (debt) in order to finance their new business. Once they open their store, all the money they get, they will invest in paying their workers wages, buying new inventory, or even opening up new locations. When consumers spend money, its good for the economy because that money will flow through this process. We will see unemployment decreasing (who is going to work in all those stores?) and gross domestic product (GDP) increase. To put in simple terms, consumer debt is good because it can help fuel the economy. People have more money to spend, which will help the economy grow. Why is consumer debt bad? When talking about consumer debt, let's talk about credit cards. I am sure you know how a credit card works. You go to the store, you buy some items (ie Crocs or slime). At the end of the month, you have to pay off everything you owe on your credit card, if you are not able to do so - you have to pay what you owe with interest. For example, if you have $100 charge left are your card and your interest is 20%, you will have to pay $120. If consumers debt gets too high, they will stop spending money at the stores. Business will not receive the money they need to stay open and we can see how the economy will quickly take a nosedive. Simply, consumer debt is bad because people have to pay it back with interest and if their debt gets too high, they will not spend money which hurts the economy.

Popular Entertainment

Airplanes

After the Wright brothers’ first successful flight in 1903, the aviation industry began developing. The federal government began to support the airline industry. In 1918 the postmaster general introduced the world’s first airmail service. Charles Lindbergh made the first nonstop solo transatlantic flight on May 20-21, 1927. It took him 33 hours and 29 minutes to fly from New York City to Le Bourget airfield outside of Paris, France. On his return to the U.S., New York showered him with a ticker tape parade, the president received him at the White House, and America made him its idol.

Spectator Sports

The idea of the athlete-heroes and the rise of sporting legends that also arose in the 1920s also helped cultivate this love of sports. Many people in the 1920s believed that athletes were ideal models for the American youth in that not only does athletics increase strength, physical ability, and talent, it also teaches morality and goodness of character. Baseball: “America’s Pastime” Babe Ruth owned 1920s sports. He was the hard drinking, hard swinging hero of the Yankees' "Murderer's Row". Along with Lou Gehrig, Ruth put together one of the most impressive baseball careers of all time. Boxing The 1920s was owned by boxer Jack Dempsey. He, like Ruth, embodied the spirit of the Roaring Twenties with his bare-knuckled upbringing in Colorado and the way he would soak his face in brine to make his skin leathery and chew pine gum to strengthen his jaw.

Movies

Movies The rise of "talkies" from the late 1920s onwards led to a radical shake-up of the entertainment industry. Live entertainment went into decline and variety theatres became movie palaces. The belief that films could influence behavior was seen by some as an opportunity to get their message across to a mass audience, others feared that the next generation of children would be warped by the immorality of gangster flicks and movie violence.

Radio

The Radio Industry In 1913 American engineer Edwin Armstrong invented a special circuit that made it practical to transmit sound via long-range radio. The radio industry began a few years later. In November 1920, the Westinghouse Company broadcast the news of Harding’s landslide election victory from station KDKA in Pittsburgh—one of the first public broadcasts in history. Radio broadcasts offered everything from classical music to comedy. Famous songwriter Irving Berlin worked in New York City’s Tin Pan Alley, where composers wrote popular music. Berlin’s famous songs include “Puttin’ on the Ritz” and “White Christmas.” Summary: First radio broadcast occurred in 1920 and “connected” American’s like never before

Popular Culture The economic prosperity and new technology of the 1920s provided many Americans with more spending money and leisure time. Millions of Americans eagerly watched sports and enjoyed music, theater, and other forms of popular entertainment. The mass media—radio, movies, newspapers, and magazines aimed at a broad audience—did more than just entertain. They also fostered a sense of shared experience that helped unify the nation Areas of popular entertainment included airplanes, spectator sports, and movies

Summary: The increase of entertainment opportunities was in part due to the increase of “free time” and a disposable income enjoyed by many in the 1920s.

AVIATION After the Wright brothers’ first successful flight in 1903, the aviation industry began developing. The federal government began to support the airline industry. In 1918 the postmaster general introduced the world’s first airmail service. Charles Lindbergh made the first nonstop solo transatlantic flight on May 20-21, 1927. It took him 33 hours and 29 minutes to fly from New York City to Le Bourget airfield outside of Paris, France. On his return to the U.S., New York showered him with a ticker tape parade, the president received him at the White House, and America made him its idol.

SPORTS The idea of the athlete-heroes and the rise of sporting legends that also arose in the 1920s also helped cultivate this love of sports. Many people in the 1920s believed that athletes were ideal models for the American youth in that not only does athletics increase strength, physical ability, and talent, it also teaches morality and goodness of character. Baseball: “America’s Pastime” Babe Ruth owned 1920s sports. He was the hard drinking, hard swinging hero of the Yankees' "Murderer's Row". Along with Lou Gehrig, Ruth put together one of the most impressive baseball careers of all time. Boxing The 1920s was owned by boxer Jack Dempsey. He, like Ruth, embodied the spirit of the Roaring Twenties with his bare-knuckled upbringing in Colorado and the way he would soak his face in brine to make his skin leathery and chew pine gum to strengthen his jaw.

Movies The rise of "talkies" from the late 1920s onwards led to a radical shake-up of the entertainment industry. Live entertainment went into decline and variety theatres became movie palaces. The belief that films could influence behavior was seen by some as an opportunity to get their message across to a mass audience, others feared that the next generation of children would be warped by the immorality of gangster flicks and movie violence.

The Radio Industry In 1913 American engineer Edwin Armstrong invented a special circuit that made it practical to transmit sound via long-range radio. The radio industry began a few years later. In November 1920, the Westinghouse Company broadcast the news of Harding’s landslide election victory from station KDKA in Pittsburgh—one of the first public broadcasts in history. Radio broadcasts offered everything from classical music to comedy. Famous songwriter Irving Berlin worked in New York City’s Tin Pan Alley, where composers wrote popular music. Berlin’s famous songs include “Puttin’ on the Ritz” and “White Christmas.” Summary: First radio broadcast occurred in 1920 and “connected” American’s like never before

New Products/ Innovations

New Product Catalog

Consumer Products In response to rising disposable income and availability of electricity, many other new goods came on the market. Americans bought such innovations as electric razors, facial tissues, frozen foods, and home hair color. Mouthwash, deodorants, cosmetics, and perfumes became popular products. Companies created many new products for the home. As indoor plumbing became more common, Americans’ concern for hygiene led to the development of numerous household cleaning products. New appliances advertised as labor-savers—such as electric irons, vacuum cleaners, washing machines, and refrigerators—changed the way people cleaned their homes and clothing and prepared meals.

Summary: The increase of disposable income and the ease of installment plans led to an increase in the consumption of new products. These new products helped to improve the standard of living for many Americans and made their lives easier.

Mass Advertising

Mass Advertising When Otto Rohwedder developed a commercial bread slicer in 1928, he faced a problem common to inventions: the invention—sliced bread—was something no one knew they needed. To attract consumers, manufacturers turned to advertising, another booming industry in the 1920s. Advertisers connected products with qualities associated with the modern era, such as progress, convenience, leisure, success, and style. Advertisers also preyed on consumers’ fears and anxieties, such as insecurities about one’s status or weight. For example, a 1923 advertisement for face cream read: “These premature lines are only the troubles of a skin allowed to be too dry. . . . The society woman keeps her skin smooth and fresh season in and season out.”

Summary: Mass advertising was designed to reach large numbers of people with the purpose of increasing sales.

Mass Advertising Although major magazines and newspapers reached big audiences, radio was the most powerful communications medium to emerge in the 1920's. The radio allowed companies to advertise their products to large populations which increased the amount of products customers bought. By 1930, 40 percent of U.S. household had radios.