hello everyone welcome to AP sources c5 today we are preparing for the AP exam we're looking at what were the causes of the economic boom of the 1920s this time period is also called the roaring 20s mostly because of its economy so why did the u.s. experience so much growth in that decade we're getting into the causes let's take a brief look at the context the late 1800s to early 1900s the US had undergone the Industrial Revolution great factories sprung up in rapidly growing cities the factories used scientific management or Taylorism to mass produce goods on scales never before seen this helped vault the u.s. into one of the largest economies in the world in 1914 World War one broke out in Europe and the u.s. joined the Great War in 1917 in 1918 the Spanish flu a global pandemic broke out and spread like wildfire across the world the end of the war in the Spanish flu helped to sink the u.s. into a deep but luckily short recession from 1919 to 1921 after the sort of short recession the US economy would boom let's take a look at those causes now first u.s. industry had been boosted by World War one as lucrative government contracts for supplies were given to big corporations secondly in the 1920s re returned to pro-business government this is in contrast to the previous Progressive Era in which presidents like Teddy Roosevelt and Woodrow Wilson were more active in regulating industry in the 1920s presidents Harding Coolidge and Hoover were more friendly to business and embraced a laissez-faire or government hands-off approach to the economy their stance can best be summed up nicely by Coolidge Coolidge's phrase from a speech the business of America is business third were the protectionist tariffs passed in 1922 that made American products cheaper than foreign products fourth was the mass production of new consumer goods some examples include cars radios refrigerators and toasters finally our last reason was the explosion of buying products on credit or debt consumers had wide access to installing plans so for expensive products like a car they could agree to monthly payments pain in full up front finally let's take a look at a famous case study the roaring 20s Henry Ford Ford as you know was the founder of Ford Motor Company the automobile industry experienced the greatest boom of all all industries and was central to the overall strong economy of the 1920s over a decade before the 1920s Henry Ford had set out to build a car everyone could afford up to that time only the wealthy had the funds to buy an automobile Henry Ford was able to reduce the price from $1200 a car in 1909 to just $295 for a car in 1928 he was able to do this by taking scientific management as I say putting that concept on steroids he built massive production facilities and utilized economies of scale and figured out how his employees could be hyper efficient in the production of an automobile the end of the 1920s Ford was producing one car every minute an incredible feat Ford also paid his employees well as he wanted them to be able to afford the products that they were making and felt higher pay would lead to more productive workers and great demand for products as workers had more money to spend and to top off the importance of the car industry it was not just cars themselves that influenced the economy but all the products that go into making a car those industries saw incredible boosts because of the increase in car production in sales including steel rubber glass and leather products ok that does it for the cause of the economic boom of the 1920s subscribe to the channel for more AP US history test review