1920’s Economic Boom New Appliances and New Debt 5.2.6 Recognize how Americans used...

1920’sEconomic Boom

New Appliances and

New Debt

5.2.6 Recognize how Americans used credit/installment plans to purchase

consumer goods in the 1920's (i.e., vacuum cleaners, washing machines,

radios, and other home appliances).

Laundry

• Laundry with tub and washboard

• Memory Narrative• http://oldfashionedliving.co

m/laundry.html• To buy this new time

saving machine, you needed cash up front, or credit.

Types of credit

• Installment plan

You buy the item and make monthly payments until paid off. There is usually a down payment required.

• Layaway Plan

You pay monthly payments until paid off, then you take it home.

Look at the picture of an advertisement that appeared in the 1920’s.

Do you think it is advertising a layaway plan or an installment plan?

What evidence do you see?

Income

• The average American made $1,500 a year in 1920, according to the U.S. Census Bureau.

$32.90 a week for working at coal mining company

$171.52 conductor monthly pay

What to buy?

• To make these decisions Americans had to analyze what they needed and what they wanted.

• What do you need?• What do you want?• What happens if you

spend too much?• http://pbskids.org/itsmyli

fe/money/managing/article2.html

Refrigerators

• How do you think a family paid $395 for a new refrigerator?

From an icebox to a refrigerator.

Technology made life easier at home.

No more buying ice, refrigerators used electricity to keep food cold.

Save up $395, or buy on credit

Automobile• 1904 Cadillac• 1922 Lincoln Town Car• Most Famous…. Ford’s

Model T• These cars changed how

things were produced in factories….. And changed the way American traveled.

• Connected the country like never before.

• But… who can afford them? How do they pay for them?

Installments

• Buying a car, meant signing a contract promising to make payments until it was paid off.

• This debt was not popular until the 1920’s. Car buying changed how Americans felt about owing other people money.

Types of Debt

• Layaway• Installment Plan• Running Tab• Store Credit

• In the 1920’s people had a booming economy. That lead many Americans to buy radios, vacuum cleaners and other appliances on credit.