🏭 Wartime gains
The USA ended the war as the richest country in the world, with strong industries and a lender's power over Europe.
The Roaring Twenties » The Boom: The First World War, Henry Ford and Mass Production
What you'll learn this session
Study time: 30 minutes
Edexcel spec: Paper 2 Section A, Investigation A3, Key topic 1
- How the First World War helped the American economy
- The main reasons for the economic boom of the 1920s
- Henry Ford, the assembly line and the Model T
- How mass production boosted other industries
'The USA, 1918-41' is one of the five Paper 2 Section A historical investigations. Students study only one of them, so work through this option only if it is one of your chosen options.
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Unlock This CourseHow the First World War helped the USA
The USA joined the First World War in April 1917, but its economy had been gaining from the fighting long before that. The fighting took place in Europe, not in America, so American factories and farms were never bombed. Instead they supplied the Allies, mainly Britain and France, with weapons, steel, chemicals, ships, food and other goods.
- More orders. Demand for American goods soared, so industry expanded and many new jobs were created.
- Banker to the world. The Allies borrowed huge sums from American banks and the American government. Before the war the USA owed money to Europe. By 1918 Europe owed money to the USA.
- Lost rivals. European factories were turned over to war work or destroyed, so the USA took over markets, for example in Latin America, that Europeans had once supplied.
- Efficiency. The war had pushed American firms to produce more, faster, and many kept those methods after 1918.
Key terms:
- Economic boom: a period when industry, jobs, profits and spending grow quickly.
- Mass production: making large numbers of identical goods cheaply, using machines and a fixed order of work.
- Assembly line: a moving belt that carries a product past workers, who each do one small job as it passes.
- Tariff: a tax on imported goods, which makes them dearer than home-made ones.
- Laissez-faire: the idea that government should leave businesses alone and not interfere in the economy.
Why was there a boom in the 1920s?
A short slump followed the war, but from about 1922 the American economy grew very fast. There was no single cause. Look for several reasons working together.
🏢 Government help
The Republican presidents of the 1920s followed laissez-faire. They kept taxes low for business and the rich. They also brought in high tariffs, such as the Fordney-McCumber Tariff of 1922, to protect American firms from foreign competition.
⚡ New industries and electricity
Cars, electrical goods, radios and chemicals were new, fast-growing industries. More homes were connected to electric power, which also helped factories to run.
💰 A big home market
More than 100 million people lived in the USA, spread over a huge country with no trade barriers between states. Rich natural resources such as coal, oil and iron kept costs low.
Another reason was mass production, which made goods cheap enough for ordinary families. This is where Henry Ford comes in. (Buying on credit and advertising also fed the boom, but they have their own lesson.)
Henry Ford and mass production
Henry Ford built cars in Detroit, Michigan. He launched the Model T in 1908 and wanted a simple, tough car that ordinary people could afford. In 1913 his factory at Highland Park began using a moving assembly line. A car frame moved along a belt and each worker added one part, so workers stayed in one place while the work came to them.
⏰ Faster
Building a Model T frame had taken around 12 hours. On the assembly line it took about 90 minutes. By the mid-1920s a huge number of cars were rolling off the line every day.
💲 Cheaper
Ford passed his savings on to buyers. The Model T cost about $850 in 1908 but under $300 by the mid-1920s. Ford made about 15 million of them. From 1914 only black Model Ts were made, which kept the process simple.
Ford also paid his workers $5 a day from 1914, which was well above the usual wage. This helped him to keep workers in a job that was boring and repetitive, and it meant some of his own workers could afford the car they built.
Cars changed American life. The number of motor vehicles on American roads rose from about 9 million in 1920 to about 26 million in 1929. Ford's rivals, such as General Motors, copied his methods, and they added colour, comfort and other models.
The effect on other industries
The car industry was so large that it pulled many other industries along with it. This is called a knock-on effect.
- Raw materials. Car makers used huge amounts of steel, rubber, glass and paint.
- Oil. Millions of cars needed petrol, so oil production and refining boomed.
- Roads and construction. New roads, bridges and petrol stations were built, and workers were needed to build them.
- Services. Garages, roadside cafes and motels grew up. Many people moved to new suburbs, because they could now drive to work, and this created building work too.
Other manufacturers copied the assembly line to make radios, refrigerators and other electrical goods cheaply. Millions of new jobs and rising wages meant more people could buy these goods, and that kept the boom going.
Common mistakes
- Saying Ford invented the car. He did not. He made cars cheap by using the assembly line.
- Forgetting that the war was fought in Europe. That is why American industry grew while European industry suffered.
- Giving the boom one cause only. Examiners want several linked reasons.
Exam-style question
Describe TWO features of EITHER Henry Ford's mass production of the Model T OR the flappers of the 1920s. [6 marks]
Model answer
I will describe Henry Ford's mass production of the Model T. One feature was the moving assembly line, introduced at Ford's Highland Park factory in 1913. The car moved along a belt and each worker added one part, so the time to build the car frame fell from around 12 hours to about 90 minutes. A second feature was that the cars became cheap. Because they could be produced so quickly, the price fell from about $850 in 1908 to under $300 by the mid-1920s, and about 15 million Model Ts were made. This brought car ownership within reach of ordinary families.
What lifts it to the top level: both features are clearly separate, and each has precise supporting detail (a date, a time and a price).
Exam tip
You pick only one of the two options. Write two paragraphs, one per feature, and give each two facts. One feature alone can score no more than 3 of the 6 marks.