The Boom: Consumerism, Mass Production and Republican Policy
A Decade That Believed in Buying
In 1920 a Model T Ford cost a worker about three months’ wages. By 1925 mass production had cut the price to under $300, and the car could be bought on credit for a small deposit. America in the 1920s did not just produce more goods than ever before — it persuaded ordinary people that buying those goods was the modern, patriotic thing to do. The Republican presidents Warren Harding, Calvin Coolidge and Herbert Hoover kept government out of the way. Industry kept the assembly lines moving. Advertising kept the wallets opening.
Three Republican policies powered the Boom: laissez-faire (minimal government interference), high tariffs like the 1922 Fordney–McCumber Act (which protected US factories from foreign competition), and low taxation on the rich (which freed money to invest). All three favoured big business.
Henry Ford and the Assembly Line
Henry Ford did not invent the motor car, but he transformed how it was built. By breaking car assembly into small repeated tasks on a moving conveyor belt, his Highland Park plant cut the time to build a Model T from over twelve hours to ninety minutes. Mass production let Ford slash the price from $850 in 1908 to under $300 by 1925. By 1929 there were over twenty-six million cars on American roads — one for every five people.
The car industry pulled the rest of the economy with it. Steel, rubber, glass, leather and paint were all needed in huge quantities. New roads, petrol stations and roadside diners spread across the country. Suburbs grew as workers could now drive to factory jobs. Ford’s decision to pay his workers $5 a day — double the going rate — was good business: well-paid Ford workers could afford to buy Ford cars.
Hire Purchase and the Consumer Society
Mass production created mountains of goods; hire purchase made sure ordinary Americans could buy them. By 1929 about three quarters of cars and half of all household appliances — refrigerators, vacuum cleaners, washing machines, radios — were bought on credit. Department stores ran whole catalogues of items available for ‘a dollar down and a dollar a week’. Buying on credit became normal rather than shameful.
Spending on advertising in the USA roughly tripled in the 1920s, from around $1.4 billion to nearly $3 billion a year. Companies hired psychologists and used new techniques: bright colour magazine advertisements, glamorous endorsements from film stars and sports heroes, and radio jingles. Advertisers stopped describing what a product did and started selling what it would make you feel: modern, attractive, successful. Catalogue chains like Sears Roebuck mailed out millions of copies; the chain store Woolworth’s grew to over 1,500 branches.
Radio was central. The first commercial station, KDKA in Pittsburgh, began broadcasting in 1920; by 1929 there were 618 stations and ten million households owned a set. Adverts bought during popular evening shows reached more Americans in one night than a magazine could in a month.
Republican Government Policies
Laissez-faire was more than an idea; it was a deliberate strategy. Coolidge famously summed it up: ‘The chief business of the American people is business.’ Treasury Secretary Andrew Mellon cut the top rate of income tax from 73% in 1921 to 25% by 1925, leaving the wealthy with money to invest in new factories and stocks. The Fordney–McCumber Tariff of 1922 raised import duties to record levels — foreign goods became expensive, so Americans bought home-made products. Trade unions were weakened: courts banned strikes, and the share of workers in unions fell.
The Fordney–McCumber Tariff (1922) raised the average duty on taxed imports to about 38%. Combined with Mellon’s tax cuts for the rich, US factories sold more, profits rose sharply, and shareholders had more spare cash to plough into the stock market — setting up the Wall Street boom of Lesson 2.
By 1929 about one in twelve American workers had a job that depended directly on cars. Steel, rubber, glass, leather and paint were all demanded in record quantities. Petrol stations multiplied from a few hundred in 1920 to over 120,000 by 1929. New roads, motels and roadside diners spread along highways like Route 66 (laid out in 1926). Electrical industries grew almost as fast: the radio sector grew fourteen-fold, and refrigerator sales rose from 5,000 in 1921 to over 800,000 by 1929. New construction methods (steel framing, electric lifts) drove a skyscraper boom — the Chrysler Building was completed in 1930 and the Empire State Building in 1931. The Boom was a network of industries pulling on each other, not a single product.
A Cycle of Boom
For middle-class Americans the Boom looked like a virtuous circle. Mass production made goods cheap, advertising made them desirable, hire purchase made them affordable, low taxes left people with more money, and tariffs kept foreign rivals out. Wages for industrial workers rose by about 25% across the decade. New industries — cars, aircraft, electrical goods, chemicals — were the fastest growing in the world. By 1929 the USA produced 42% of the world’s manufactured goods.
But the cycle had a hidden assumption: that wages, credit and confidence would all keep climbing together. When historians later disagreed about whether the Boom was a genuine miracle or an unstable bubble, this is the debate they were having. Lesson 2 looks at the Wall Street side of that bubble — and at the Americans the Boom never reached.