Economic+Development+(Zach)

__Economic Development of The 1920’s__

The decade of the 1920’s was a period of vigorous, vital economic growth. It was the first modern decade and many economic developments can be found during these years. There is a quick adoption of the automobile and a decrease of passenger train travel. Suburbs had been growing since the late nineteenth century. Their growth was tied to train and trolley access which was limited to many large cities. The access to more areas with the use of a car changed this and the growth of suburbs began increase. The increase of cars and trucks during the 1920’s led to the construction of many new roads. The expanding electric networks led to new appliances and new types of lighting and heating for homes and businesses. The use of the radio, radio stations, and telephones helped to break up isolation between areas. Activities like traveling, going to the movies, and professional sports became major businesses. This period saw major improvements in business organization and manufacturing technology. The United States became largely involved international trade and global business during this time.

The overall production in the economy, called GNP, is the best measure of economic activity. GNP growth during the 1920s was quick. It improved on average 4.2 percent a year from 1920 to 1929.In mid-1920 the American economy suffered a small depression that lasted about a year, but quickly returned back to normal. There was a very small recession in 1924 as well, and another recession in 1927 which were related to issues with oil prices and the six month shutdown of all of Henry Fords factories. The Great Depression began in the summer of 1929. Ownership of cars, new household appliances, and housing was spread through the population. New products and processes of producing those products drove this economic growth. The electricity market benefited greatly during the 1920’s. Many new products and services relied on electricity such as radios, televisions, lighting, etc. Stocks from these electricity companies helped create a stock market boom in the 1920’s.

Population growth declined slowly during the 1920’s. The decrease in foreign immigration during this time was a major cause of the decrease in population growth. This decrease in growth rate can also be attributed to the switch from rural to urban environments. Families in urban environments tend to have fewer children. Also, this period saw an increased number of women in the workforce. Women were busier during this time and had less time to have or raise children.

Due to the World War, agricultural production in Europe declined. The demand for American agricultural rose. This demand led to the increase of farm product prices and incomes. Farmers expanded their land and bought new machinery in hopes of making money. The large demand for farming led to an increase in the price of land. Europe eventually recovered from the war, causing a decrease in imports and income. Many farmers fell into debt and there were large amounts of foreclosed farms and uncultivated land. The net income of farmers fell by 73% and many farmers left their land.

Big businesses rose and grew during the 1920’s. The automobile industry sparked the start of big industry and brought forth efficiency with the assembly line. Other large businesses arose as well such and the tire and steel industry. This was a time where large industries and firms thrived. With these large industries came illegal activity such as price fixing. Industries such as steel, tobacco, oil and food took part in these activities.

During the 1920’s, the economy relied heavily on energy sources such as oil, petroleum, and electricity. People relied on these sources of energy for their homes, transportation and appliances. Communication became more important during this time with the increased use of the telephone and radio. The use of banks, credit, and stocks increased as well during this time giving people freedom to invest and spend carelessly. This led to spread of department stores, chain stores and shopping centers. Industry was heavily relied on during this time and international trade became popular. The economy was very active and was experiencing things it never had before. This was important to the United States because of the advancements it experienced. It also may have proved to be harmful because this overloaded economy is what is said to have caused the great depression in late 1929. No matter what way one looks at it, the 1920’s was a very important time for the United States economy.

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