A BUSINESS BOOM

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A CONSUMER ECONOMY

Consumer Economy – One that depends on a large amount of buying by consumers

Consumers – individuals who use products

Wages rose 28%

# of millionaires doubled

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BUYING ON CREDIT

Installment Plan – a system that lets customers make partial payments (installments) at set intervals over a period of time until the total debt is paid – fueled consumer economy

Up to this time borrowing money for anything except a house or land unthrifty even immoral

People bought who would not have – despite interest rates from 11 to 40%

1929 60% cars; 70% furniture; 80% vacuum cleaners, radios, and refrigerators; 90% sewing machines, washing machines

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ELECTRIC POWER

customers quadrupled

63% people with electric power (urban)

4% American farms (many used wind powered generators)

GE formed 1892 – take over Thomas Edison’s electric light business

Sold household electrical appliances – electric motors

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New Products to Buy

Electric toasters,

ovens,

sewing machines,

coffee pots,

irons, and

vacuum cleaners,

telephones,

cosmetics

Ford and the Automobile

Ford and the “Model T”

1896 perfected first version of lightweight, gas-powered car called quadricycle (sold it to make a better one)

1903 started automobile company

1908 sold 30,000 Model T’s

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FORD’S ASSEMBLY LINE

wanted to “democratize the automobile” produce sell cars at prices ordinary people could afford

assembly line – manufacturing process in which each worker does one specialized task in the construction of the final product

Made assemble line more efficient – like today

Model T made every 24 seconds

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MODEL T 1914 (first year of assembly line)

Model T’s $490 each (1/2 price from year before)

Ford “any color as long as its black” – black paint dried faster – 1928 Model A color variety

General Motors – low priced Chevrolet – many colors

Ford – vertical consolidation – controlled businesses that make up phases of products development (raw ore, coal mines, wood, rubber, glassworks, railroads, fleet of ships, tools)

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COMPLEX BUSINESSMAN

1914 praised for $5-a-day rate for workers (double other factories)

used violence to fight unions

gave millions of Americans cars – but refused to meet tastes

1936 slipped to 3rd place in car business

contempt for history

1915 tried to talk Europe out of WWI

1920 blamed Jews for world’s problems in his newspaper – sued for slander – apologized – sold paper

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INDUSTRIAL GROWTH

nation’s biggest single industry – automotive

garages, car dealerships, motels, campgrounds, gas stations, restaurants, truck lines

3.7 million people employed directly or indirectly because of automobile in 1929

$2 million spent to build/maintains roads and bridges

Power of monopolies declined even while American business was getting bigger

Publishing, motion picture, machine making, industries boomed

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