Lesson video

Hello, I'm Mr. Marchant, and thank you for joining me for today's history lesson.

My job today is to help guide you through our history resources in the lesson, and I'm gonna be working to make sure that by the end of our time together, you can securely meet our lesson objective.

Welcome to today's lesson, which is part of our unit on the boom years in the USA, where we are asking ourselves, how did the boom affect the American people? By the end of today's lesson, you'll be able to explain why there was an economic boom in the United States in the 1920s.

There are five key words which will help us navigate our way through today's lesson.

Those are GDP, shares, laissez-faire, tariff, and consumer goods.

GDP refers to the total value of goods and services produced by a country in a year.

Some companies sell shares in order to raise money.

People who own shares in a company receive part of the company's profits.

Laissez-faire beliefs suggest that the government should not interfere with the economy.

A tariff is a government tax on imports into a country.

And goods which people use for their own benefit, such as cars or clothes are known as consumer goods.

Today's lesson will be split into three parts, and we'll begin by asking ourselves, what was the boom? In the 1920s, there was significant economic growth in the USA.

Historians have referred to this period as "the boom." Many businesses grew during this time, and many Americans experienced an improvement in their standard of living.

Historians can use various indicators to demonstrate that the US economy boomed during the 1920s.

These include GDP, stock market value, unemployment, and average wages.

So we'll look at each of these in turn.

So let's start by focusing on US GDP.

The value of US GDP increased by over 40% from 1920 to 1929.

As we can see in our table, every year between 1920 and 1929, the value of GDP increased from $687.

7 billion in 1920 to $977 billion by 1929.

We can also look at the stock market to demonstrate that there was a boom in the USA.

Americans were able to buy shares in US companies.

Wall Street was the main location for buying and selling shares in the USA.

Growing numbers of people invested in shares as they were confident that company profits would keep increasing.

577 million shares were traded in 1927 alone, giving a very good indication that Americans were confident that their economy was growing and doing well.

So thinking about what we've heard so far, which statement is most accurate? The number of Americans investing in shares fell as confidence that business profits would grow was low.

The number of Americans investing in shares rose as confidence that business profits would grow was high.

Or the number of Americans investing in shares rose, despite businesses making less profit.

So pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that the correct answer was B.

The number of Americans investing in shares rose as confidence that business profits would grow was high throughout the 1920s.

By 1927, 577 million shares were being traded.

So let's turn our attention to unemployment.

The 1920s were a period of low unemployment in America.

In 1920, the unemployment rate was 5.

2%.

In 1923, this had fallen to 2.

4%, and by 1926, this had fallen even further to 1.

8%.

There was a slight increase between 1926 and 1929 to 3.

2%.

But what we can see is that it's still a very low figure for unemployment and even lower than it had been in 1920.

So considering what we've just heard, let's make sure our knowledge is secure.

We have a statement on the screen that reads, most Americans struggled to find work in the 1920s.

Is that statement true or false? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that that statement was false, but we need to be able to justify our response.

So two justifications have appeared on the screen.

The first says that unemployment was high throughout the decade, and the second says that unemployment was low throughout the decade.

So which one of those two justifications is correct? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that the correct justification was B, unemployment was low throughout the 1920s.

Because of this, we can tell that most Americans were actually finding it quite easy to find work.

They were not out of work because unemployment was low.

And finally, we'll focus on average wages.

On average, American workers enjoyed rising wages during the 1920s.

Average incomes rose by over 20% in the USA during the decade.

This increased workers' standard of living because if they had higher incomes, they'd be able to afford more products, more things like consumer goods, which could raise their standard of living the comfort in which they lived.

So let's just make sure our understanding is really secure.

How much did average incomes increase by in the USA during the 1920s? Was it 10%, 20%, or 40%? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that the correct answer was B, average incomes increased by 20% during the 1920s.

This allowed standards, a living to rise as Americans were able to afford more things to help them live in greater comfort.

So we are now in a good position to put all of our knowledge about what the boom was into practise.

I want you to complete the passage shown on the screen by adding in the missing words.

The words you need to use are listed underneath the paragraph.

However, be very careful because we have five gaps which we need to fill.

However, you have more than five words listed at the bottom.

So you need to think really carefully about which terms would be most appropriate.

So pause the video here, attempt to fill all those gaps, and press play, and you're ready to see the right answers.

Okay, well done for all of your hard work on that task.

So I asked you to complete the passage by adding in the missing words.

So your answers should have looked like, historians can detect many signs which show that there was a boom in the US economy during the 1920s.

More Americans became involved in the stock market, 577 million shares were traded in 1927 alone.

The USA's GDP increased by over 40% during these years.

Furthermore, average incomes for workers in the US increased by 20%.

Across the 1920s, unemployment remained low and fell overall between 1920 and 1929.

So really well done for your work on that task, especially you got every single one of those gaps filled in correctly.

So now we're ready to move on to the second part of today's lesson where we are gonna focus on the causes of the boom.

There were several key factors which contributed to the boom in the USA.

These were World War I, the Republican government policies, mass production, advertising, and hire purchase schemes.

So we're gonna think about each of these factors and how they helped the US economy.

The US economy had already been doing well before the beginning of World War I, but the conflict was important for accelerating American economic growth.

Unlike other major powers such as Britain, France, and Germany, the USA was not involved in fighting for most of the war.

Instead, American businesses were able to make large profits by providing supplies and loans to countries like Britain and France who were fighting.

Because Britain, France and Germany were exhausted by fighting in the war for so long, World War I also helped the USA to overtake its international rivals in certain areas, such as the chemicals industry.

Policies introduced by the Republican party in government also helped to create the boom.

From 1921 to 1933, every US president was a Republican.

The Republicans favoured laissez-faire policies such as decreased regulation of industry and low taxation.

In both cases, these laissez-faire policies meant that businesses faced lower costs and were able to make greater profits.

The Republicans also introduced tariffs such as the 1922 Fordney-McCumber Tariff.

These tariffs put higher taxes on goods imported into the USA.

This made foreign goods more expensive to buy, so Americans were more likely to perch US-made goods instead.

This boosted American businesses as well as providing extra revenue for the government.

So thinking about what we've just heard, we wanna make sure that our understanding is really secure.

So which two of these government policies could be described as laissez-faire? Making businesses pay a minimum wage to workers.

Lowering taxes on business.

Regularly inspecting working conditions in factories, or allowing businesses to hire and fire workers as they wished? Remember, you are looking for two correct answers to this question.

So pause the video here and press play when you're ready to see the right answers.

Okay, well done to everybody who said that the correct answers were B and D.

Lowering taxes on businesses and leaving businesses to hire and fire workers as they wished could both be considered laissez-faire because the government allowing businesses to act as they want.

Mass production was also important for the boom in the USA.

Mass production became increasingly widespread in American industry during the 1920s, especially as companies began to use assembly lines in their manufacturing processes.

Assembly lines involve products such as cars and radios being built bit by bit by different workers.

Rather than focusing on building the entire product when working in an assembly line, each individual worker only had to focus on a small part of the manufacturing process.

Over time, the workers on assembly lines would become better and quicker at the tasks they were assigned to complete.

The assembly line also reduced the physical demands of jobs.

So employers were more willing to hire women in factories.

The assembly line allowed companies to reduce their costs, whilst the amount they manufactured increased.

For instance, the number of radios produced annually in the USA rose from 100,000 in 1922 to 350,000 by 1929.

So let's just try answering a few more questions to make sure we really understand what we've just heard about some of the causes of the boom.

I want you to write the missing word in the following sentence.

Assembly lines were an important method for the blank production of goods.

So what's the missing word? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that the missing word was mass.

Assembly lines were an important method for the mass production of goods.

And let's try another question.

I want you to identify the two accurate consequences of using assembly lines.

Your options are, costs for businesses decreased.

Time taken to produce goods decreased.

And the amount of goods produced decreased.

And remember, you're looking for two accurate consequences of using assembly lines.

So pause the video here and press play when you're ready to see the right answers.

Okay, well done to everybody who said that the correct answers were A and B.

Using assembly lines reduced the cost for businesses of manufacturing, and it also reduced the time taken to produce goods.

The amount of goods produced increased massively by using mass production.

That's really what we're suggesting when we say mass production, that lots was produced and yet the costs were falling.

So this was seen as a very beneficial thing for American companies.

In the 1920s, the USA was increasingly described as a consumer society, as greater numbers of people were purchasing consumer goods.

Many modern products such as electric-powered radios, telephones, refrigerators, and vacuum cleaners became available and promised to make people's lives easier.

High demand for these products led to increasing production in factories across the USA.

Consumer demand did not rise just because of the availability of new products themselves.

Demand also increased due to changes in advertising, a new method for buying consumer goods.

Colourful billboards, newspapers, and magazines were all used by companies to encourage people to buy their products.

Alongside persuasive slogans, advertisers also use new technologies such as the radio to reach even more potential customers with their messages.

Furthermore, many adverts in the 1920s encourage people to buy goods by relying on hire purchase schemes.

These schemes encourage people to buy now, pay later.

hire purchase schemes allowed American consumers to acquire new products even when they did not have the money to pay in full upfront.

This was because with hire purchase schemes, American consumers were allowed to pay in smaller amounts over a fixed period rather than paying all at once.

This meant that a growing number of people in the USA were able to afford to purchase new consumer goods.

In the 1920s, 6 outta 10 cars and 8 out of 10 radios were purchased in this way.

So let's make sure that our understanding of what we've just had is really secure.

Which development allowed consumers to purchase goods without paying the full price upfront? Was it advertisements, hire purchase schemes, or mass production? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that the correct answer was B.

hire purchase schemes allowed consumers to purchase goods without paying the full price up front.

This made it easier for more Americans to begin buying consumer goods.

And I want you to write the missing number in the following sentence.

In the 1920s, blank out of 10 radios were purchased using hire purchase schemes.

So what's the missing number? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that the missing word was eight.

In the 1920s, 8 out of 10 radios were purchased using hire purchase schemes.

So just to recap from everything we've heard, we've seen that there were several key factors which contributed to the boom in the USA.

These were World War I, Republican government policies, mass production, advertising, and hire purchase schemes.

So we are now in a good position to put all of our knowledge about the causes of the boom into practise.

For task B, we're gonna complete two different parts.

Firstly, I want you to study the explanations of what caused the boom shown in our table.

For each of the explanations, I want you to write the factor which it's referring to.

So pause the video here and press play when you're ready to see the right answers.

Okay, well done for all of your hard work on that first part of task B.

So I asked you to study the explanations of what caused the boom in the table, and to identify which factor each explanation was referring to.

For our explanation, that said, US businesses profited from selling and making loans to countries like Britain and France.

War exhaustion overseas also helped the US overtake rival economies.

Well, that was referring to World War I.

For our explanation, that said, new methods were used to capture people's attention, such as increased use of colour and broadcast on the radio that was referring to advertising.

And for our explanation that said, assembly lines were used to manufacture goods, production became quicker and cheaper as each worker only had to complete the same small task repeatedly, that was referring to the benefits of mass production.

So really well done if you got all of those correct.

So now we can move on to the second part of task B.

This time, I've given you two factors in the table and I want you to write a brief explanation of how each of these factors contributed to the boom in the US economy.

So pause a video here and press play when you're ready to reflect on your responses.

Okay, well done to everybody for all your hard work on that task.

So I asked you to study the factors shown in our table and to write a brief explanation of how each of these contributed to the boom.

So for government policies, your answer may have included, the Republicans introduced laissez-faire policies such as low taxation and reduced regulation, which kept business profits high.

New tariffs also made it more likely that US consumers would purchase goods from American companies.

For our second factor, which was hire purchase schemes, you may have written, hire purchase schemes, made it easier for consumers to purchase new goods as they no longer needed to pay the full cost upfront.

This led to an increase in sales as more people could now afford to purchase new goods like cars and radios.

So really well done.

If your own explanations look something similar to those two models, which we've just seen.

And now we are ready to move on to the third and final part of our lesson for today, where we are gonna focus on the cycle of prosperity.

The USA's boom did not just depend on separate causes, different causes affected one another, encouraging further economic growth.

This process is referred to as a cycle of prosperity.

So let's look at a basic example of how a cycle of prosperity could work.

So let's imagine that there's an increase in the production of consumer goods, for example, as a result of using mass production.

Well, as production increases, companies would need to hire more workers and they may well pay these workers higher wages in order to attract them to the jobs in the first place.

So with more people earning and with workers earning higher wages, all of a sudden, more people are able to afford consumer goods.

And if more people are able to afford consumer goods, then sales of consumer goods will increase.

And as those sales increase, companies will begin to increase the production even further, which starts the cycle all over again.

So we can see here that some of the benefits and some of the causes of economic growth reinforce themselves, and this is what the cycle of prosperity is all about.

So let's make sure that our understanding of how a cycle of prosperity works is really secure.

I want you to study the diagram.

What should be shown in the box marked X? Should it be more workers employed on higher wages, decrease in demand for consumer goods or unemployment rate increases? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that the answer should be A, more workers employed on higher wages, this would happen because to increase the production of consumer goods, companies would need to start hiring additional workers as well.

So that's what follows for the increase in production.

And let's try another question.

Study the same diagram, but this time, I want you to think about what should be shown in the box marked Y.

Is it sales of consumer goods decrease, sales of consumer goods increase, or prices of consumer goods increase? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said the correct answer was B, sales or consumer goods increase.

This would happen because if we look at the box before, more people are able to afford consumer goods, well, as more people are able to afford, they're gonna start buying, which means that sales would increase.

And if we think about the box that follows Y, well, there would be an increase in the production of consumer goods if sales increased 'cause companies would try to match the rising demand.

So let's now think about the cycle of prosperity in a specific industry.

The radio industry was one of many to benefit from the cycle of prosperity.

In 1922, radio sales in the USA were worth $60 million.

By 1929, this number had increased by more than 10 times.

Radio sales by 1929 were worth $843 million.

If we think about radio ownership in the USA, we can see a similar trend.

In 1921, there were 60,000 radios owned in the USA, but by 1929, this had increased to 10 million radios owned in the USA.

So considering what we've just heard, sales of radios increased significantly through the 1920s, but by how many times? Was it two times as many in 1929 compared to 1922, five times as many in 1929 compared to 1922, or more than 10 times as many in 1929 compared to 1922? Pause a video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said the correct answer was C.

Radio sales were worth more than 10 times as much in 1929 as they were in 1922.

A significant increase, and we can explain that in large part because of the cycle of prosperity.

So if we think about radio sales, we know that radios were mass produced in the 1920s.

Now, mass production of radios meant that more workers were employed on higher wages to help manufacture them.

Now, if we think about these workers, they would have credit available to them through things like hire purchase schemes.

Combined with their higher wages, hire purchase schemes meant that many more Americans were able to afford radios.

And as more Americans could afford radios, the sales of radios increased.

As the sales of radios increased, more radios were produced in turn to meet this higher demand.

And so the cycle of prosperity started all over again.

And this is partly how we can explain why there was such a significant increase in the value and number of radios sold in the USA.

So considering what we've just heard, we have a statement on the screen that says, the cycle of prosperity only benefited businesses.

Is that statement true or false? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said that that statement was false, but we need to be able to justify our response.

So two justifications have appeared on the screen.

The first says that the cycle reduced profits for businesses, but made goods available for consumers.

The second says that the cycle made goods more affordable for consumers and increased business sales.

So which one of those two justifications is correct? Pause the video here and press play when you're ready to see the right answer.

Okay, well done to everybody who said the correct justification was B, the cycle made goods more affordable for consumers and increased business sales, which means that businesses and consumers benefited from the cycle of prosperity.

So considering everything that we've heard, we're now in a good position to put our knowledge into practise.

I want you to write one paragraph to explain how American businesses and consumers benefited from a cycle of prosperity.

You may refer to mass production, credit and radios as part of your answer.

So pause video here and press play when you're ready to reflect on your response.

Okay, well done for all of your hard work on that task.

So I asked you to write one paragraph to explain how American businesses and consumers benefited from a cycle of prosperity.

Your answer may have included, mass production was an important part of the cycle of prosperity.

Mass production led to more workers being employed and paid higher salaries.

As a result, more Americans were able to afford consumer goods like radios.

These products also became more affordable because of credit, which allowed people to buy now pay later.

For example, 8 out of every 10 radios were purchased in this way.

As more people purchased consumer goods, sales and profits increased for American businesses.

So production was increased further.

This began the cycle of prosperity over again, making businesses and workers richer.

So really well done if your own answer looks something similar to that model.

Alternatively, if you manage to make sure that you refer to mass production credit and radios as part of your explanation, And that means we've now reached the end of our lesson for today.

So we are in a good position to summarise our learning about the causes of the boom.

We've seen that the US experienced an economic boom during the 1920s as living standards rose and businesses grew.

Mass production, government policies, and the effects of World War I helped businesses grow and increase their profits.

Demand for consumer goods increased.

A consumer society developed as hire purchase schemes and advertising helped people to purchase more consumer goods.

And growth in the USA was accelerated by a cycle of prosperity.

So really well done for all of your hard work during today's lesson.

It's been a pleasure to help guide you through it, and I look forward to seeing you again in future as we think further about the effects of the boom years on the American people.