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Summary CIE IGCSE History Paper 4 USA Depth Study Notes
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CIE IGCSE History Paper 4 USA Depth Study Notes: -> Fully Comprehensive -> Detailed -> Clear and Concise -> Grade 9
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Topic 1: How far did the US economy boom in the 1920s?Background:
- Emerged as richest nation in the world after WW1, as not affected much
- Between 1922 and 1929 GNP increased by 40%
- European countries became buyers of US goods (their own countries destroyed)
- US banks lent out almost $10m USD in loans to Europe
- American businesses expanded globally as competitors struggled with post-war recovery
Why did the Economic Boom Occur?
USA’ natural resources and Industry:
o Plentiful natural resources and raw materials such as iron, coal and oil
o USA could expand rapidly without relying on imports – affected by WW1
o Massive export market
o Able to supply demand and activity in manufacturing
o The motor car industry used 75% of US glass, 90% of petrol and 80% of rubber
production
o Successful wells fueled supply for motor industry
o Lucas Well in Spindlehop, Texas produced around 1.1 million barrels for nine days
before being capped
o By 1919, the USA produced 2/3 of world’s oil at 577 million barrels - export
Mass Production:
o Made goods cheaper and facilitated the rapid, large-scale production of new
technologies
o “Assembly line”- increased efficiency and lowered costs making good more affordable
o In 1911, Ford Model T cost $1100 and by 1928 just $200
o Motor industry would stand on MP – 7% of employment
o Large-scale development of new technologies as much cheaper to produce, such as the
vacuum cleaner and washing machine
o In 1929, 160 million electrical goods sold, increased productivity
Easy Credit:
o Allowed public to buy and pay back
o Facilitated consumer liquidity and demand with mass consumerism
o 60% of car sales by 1928 purchased on credit
o Companies made huge profits from interest payments
o Credit outstanding totaled $3 billion in 1929
Republican Policies:
o Low Government Interference:
Lower taxes and less regulation
Aided large businesses
By 1929 – largest 200 corporations possessed 20% of the nation’s wealth
“trickle-down” Economics
From 1919 to 1929 – workers made 26% more on average
, Stock market trading boomed
o Tariffs:
Fordney-McCumber Act - 1922
Fee on imports
Encouraged American consumers to buy goods produced in USA rather than
abroad
Made foreign goods more expensive – guaranteed domestic markets
Confidence:
o Created a consumer society
o Speculation – buying on the margin
o By 1929, there were 20 million shareholders out of 120 million population
Motor Car:
o Industries benefitted – entertainment with access to cinemas with new roads and gas
stations
o Growth in suburbs and sports, nightclubs and the cinema
o By 1920 – 7.5 million cars – promoted building of highways
o In 1922, 16,500 km roads built at a cost of $189 million
o Benefit trade and the transportation of goods and resources
New Industries:
- High demand for new consumer goods
- Motor Car Industry – over 26 million cars made by 1929, Ford and Chrysler made huge profits
- Steel and Oil – 20% of steel production could be attributed to the motor industry by the mid
1920s
- Construction Industry – new homes, factories and school – new skyscrapers like the Empire
State Building late 1920s
Traditional Industries:
- Overproduction and competition with new technologies
- Textiles like cotton and wool struggled to compete with synthetic fibres like rayon
- Coal, tin and copper were overproduced after the end of the war and prices dropped rapidly –
coal was replaced by gas and oil + lack of demand from Europe
- Mechanisation and machinery meant fewer workers needed
- 42% of population living below poverty line
Farmers:
- 1912-1929 profits decreased from $22 billion to $12 billion
Overproduction:
- Mechanisation + improved fertiliser meant more produce – overproducing wheat so prices fell
dramatically
- Wheat prices fell from $2.50 a bushel in 1920 to 38 cents in 1929
Falling Demand:
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