Reasons Behind the Economic Boom of 1920's

Reasons Behind the Economic Boom of 1920's

There was an economic boom in the 1920s for 5 main reasons. Firstly

the growing strength of American Industry meant that the USA was a

leading producer of many raw materials. This was partly due to the

second main cause of the boom, which was World War 1. This had helped

the American Industry to grow, as during World War 1 new markets had

opened up to America. Also, after World War 1, America took over as a

leading producer as many European industries had suffered greatly

because of the war. Government policies meant that businesses could

thrive without government interference. World War 1 led to new markets

being opened to America. This resulted in America developing new

industries and new industrial ideas. These new industries meant that

Americans believed that America was the most powerful country in the

world. Americans therefore bought consumer goods because it was a sign

of America’s prosperity. This led to more and more things being bought

which aided the economic boom.

The growing strength of American industry was a big factor in the

economic boom. In the twenties, industry took a very big step. It

nearly doubled. It was partly due to the fact that the USA was rich in

natural resources such as oil, coal and iron, which it could sell to

European countries. America’s capacity to produce coal and iron was

constantly growing. In the 1920s the USA was the leading producer of

oil in the world. America’s agriculture was becoming the most

effective and productive in the world. The industrial strength of

America is probably the most important cause of the economic boom. It

allowed ...

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...as it led to America having

money to invest in new industries. The First World War was the main

reason for America’s industrial strength as many countries were paying

America back money that they had loaned during the war, with interest.

The First World War also meant that other countries were not strong

enough to keep up with America’s industry. Republican policies were

also contributory factors to America’s industrial strength, as one of

the policies was to leave businesses alone. This meant that all

industries thrived. New developments led to mass production, which

allowed the average American to buy new items that were manufactured.

Finally, this led to people believing that America was destined to be

the strongest country in the world, encouraging them to buy more items

and shares, which created the economic boom.