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How Far Were the Policies of the Republican Party the Main Reason for America’s Economic Success in the 1920’s

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How far were the policies of the Republican Party the main reason for America’s economic success in the 1920’s [50 marks]

Although America remained neutral and did not join World War One until 1917, they were already increasing their country’s profits by selling goods such as: weapons, food, equipment and other ammunition to both sides of the war. During World War One, as well as selling goods, America became ‘the banker’ to the rest of the world: loaning countries money at a very high interest. According to the First World War commissions “Britain, France and Italy owed the USA $22 billion plus interest”, this is showing that USA was at a very stable place financially even before the 1920s began. When the war ended Woodrow Wilson put forward his 14 Points which included a League of Nations. The League of Nations’ overall aim was to prevent war from breaking out again. America’s congress at the time decided that it would be best for America in the long run not to join the League of Nations because, congress believed that the USA should not interfere in any European or world affairs. Refusal to join the League of Nations made America an isolationist country. When Warren G. Harding won the presidential election and became president in 1921 a political party called the Republicans took over from the Democrats and the American government. 1920s America was known as the ‘Roaring twenties’ because of the entertainment and the crazes sweeping the country. There were lots of reasons for the economic boom including: natural resources, impact of the war entertainment, mass production, mass marketing, credits and the policies of the Republican party. All of these made America such a prosperous country a reputation that continues today. In my opinion I think that the Republicans were a reason for America’s economic success in the 1920’s however I think that they weren't the main reason.

When Warren Harding won the election in 1920 the Republican Party took over the Democrats, changing the American government. The Democrats liked to get involved with the government and society whereas the Republicans did as little interference as possible and let businesses and individuals run their companies how they wanted to making the American dream a reality. The Republicans remained in power throughout the 1920’s because they won votes off the senate and the House of Representatives; the public supported the Republicans because of the policies they introduced during the decade. In my opinion the most important policy that the Republicans introduced in the 1920’s was tariffs. This policy was put into place when Warren Harding promised a “return to normality” In order for his promise to be fulfilled he increased tariffs and introduced the Fordney McCumber Act of 1922. The Fordney McCumber act imposed a tax on goods from foreign countries making them ALWAYS more expensive than American goods. Also cutting taxes would be an effective policy for the Republican government because they believed that if taxes were low, people would have more money to invest in stocks and shares. These investments would help the American industries expand. The danger with the Fordney McCumber tariff for the American economy in the long run was that every country used them and stopped American exports, which damaged the international trade, a reason why the Republicans disliked trade unions. The name of this Republican policy was protectionism. Another policy that was introduced was by Calvin Coolidge (1923-29) and that policy was Laissez-Faire. Laissez-Faire is French and it translates ‘to leave alone’, which is exactly what the government did by interfering as little as possible with the running of the businesses and peoples lives. This was important because this allowed businessmen and entrepreneurs such as: Henry Ford, J.D. Rockefeller and Harvey Firestone to run their own business with no restrictions from the government, which allowed more jobs and an increase in the country’s wealth. A famous quote from Coolidge is “The business of America is business” this means that America’s job was to make as much money as they can; this was achieved by using the laissez-faire policy. The laissez-faire policy gave businessmen the freedom to make their own money and become rich. During the 1920’s the Republicans also lowered taxes on income and company profits, this allowed that the money they invested to be spent on American industries’ and buildings resulting in people having more jobs, which allowed people to have more money, which allowed them to buy more consumer gods. A phrase used to showcase people success was ‘rugged individualism,’ A rugged individual should not depend on the government for help and should solve their own problems by working hard. All Republicans believed that people succeeded with their own hard work. Although America felt wealthier than ever in the 1920s lots of people were left out such as: black people, Native Americans, immigrants and farmers. Though the policies of the Republican party/presidents was a reason for America’s economic success, there were other factors that contributed to the boom.

“Car sales were the key to American prosperity in the 1920s” writes B.Manning in his autobiography which was published in 1981. This is suggesting that other people thought that car sales were a more important reason than the policies of the Republican Party for the boom of America in the 1920s. Some Americans would agree with this because the price of the car went from $850 in 1908 to about on average just $250 in 1925, this meant that nearly every American owned a ‘Model T’ car made by Henry Ford. A ‘Model T’ car was slow and very difficult to drive however every person in America wanted one because of the advertisements, Calvin Coolidge said: “Advertising makes new thought, new desirers, and new actions. It is the most powerful influence in adapting and changing the habits and the way of life affecting what we eat what we wear and the work and play of the whole nation” Henry Ford made it possible for nearly every American to own a car because he used mass production and standardization. The cars were made on an assembly line in which parts of the vehicle were added as it was passed along the line, all the workers would do nothing else but that one job, so as they fixed the part quicker more cars would be produced in a day. Ford was producing a car every 10 seconds. “Customers can have a car painted any colour that he wants as long as it’s black” was the phrase that explained standardization. Standardization is when a product is only available in one colour or one size. The motor industry lead also lead to other industries such as: steel, rubber, glass and leather. Mass production lead to an increase in car sales, this allowed more jobs in industries, diners, motels and gas stations, all this lead to America becoming more prosperous. Texas which was famous for oil, and as a result of this grew rich as they were drilling oil and supplying every car with petrol, oil was also known as ‘black gold.’ In my opinion I think that mass production and the motor industry played a big part in the economic boom. I think that maybe it is a more important reason than the policies of the republican presidents. All of the increase in car sales wouldn’t have been possible if it wasn’t for advertising. As well as Henry Ford and mass production, advertising played a big part in America’s economic success. Henry Ford’s motor company wouldn’t be as big as it was if it wasn’t for advertising. Advertising changed the minds of American citizens, because they would feel less of an American person if they did not have a particular product. More consumer goods became more available in the 1920’s and more houses had electricity. Companies wanted to make sure that people could buy products easily so advertising became very popular in the 1920’s. There were lots of ways in which companies such as: Coca Cola and Henry Ford advertised their goods, this included: billboards, catalogs, T.V and radios. There are catalogs Sears Roebuck which advertised these goods. During the 1920’s perhaps as a result of an increase in wealth many Americans stated to think that they deserved a little luxury and that they should try to keep up with their neighbors’ lifestyles. Majority of the American population were prepared to borrow money or pay for things using credit so that they could have the latest product whether it may be a new fridge, new radios, whatever it maybe the nation was prepared to take risks. Department stores introduced a buy now pay later scheme this was known as hire purchase however the only negative thing about this is the longer you take to pay them back the higher your interest would be, so you could buy a new TV, for $650 and pay $800 by the time you pay the company back. Advertising created a cycle of prosperity: because of advertising, the demands for goods increased, industries increased, more shop were available, more people needed jobs, the more jobs people had the more money they had, and all of the money they had they could buy new products. In my opinion I think that so far advertising was the main reason for America’s success because without it mass production wouldn’t have been possible, businesses wouldn’t have grow and the Republicans wouldn’t have had to introduced by the policies.

Although the stock market was a potential risk for America’s economy, this wasn’t always the case in the 20’s. President Hoover made Americans feel that they were economically safe and secure in the country because he said that American people had more luxuries, better homes and nicer clothes and fuller bank accounts than any other country. Anyone can be rich was a popular phrase in America in the 1920s because it gave people confidence and hope as it encouraged them to keep taking risks and to keep buying on margin. Buying on margin meant that when normal citizens did not have enough money to buy the stocks they would have had to borrow money from banks. They could borrow money from small banks all around town. These banks would be happy to lend people money because the will make profit by increasing the interest rate. Stockbrokers would have had to charge people high interest rates to make profit and they were also able to demand payment of the loan at any time. This would stimulate the economy and encourage other businesses to grow. People were tempted to buy and sell shares on the stock market because it was an easy way for them to become rich. In the 1920’s many speculator bought stocks on margin and as they were so confident they never considered the risk that they were taking. Speculators are people who hoped to make lots of money on the stock market. However those risk people took consequently led to the Great Depression and the Wall Street crash later on in the century.

America during the 1920s saw the development of the cinema industry. Hollywood which was just outside of Los Angeles, California was the location for a number of studios including: MGM, Warner Brothers and Paramount. They chose California for the location of these studios as it was always summer in this American state. As wealth increased so did the desire for entertainment, according to the Historian Josh Brooman “film makers realised that the star or leading performers were more important than its plot.” This source is saying that no matter how bad a film was people came to the cinemas to see stars. Stars in the 1920s that people came to see in movies were either: Charlie Chaplin, Clara Bow or Al Johnson. The cinema like advertising also created a cycle of prosperity; as more movies were being made, more sets were needed to built, more jobs became available to become an actor or an actress, all of these increased Americas economic success even more. More cinema tickets were being sold in the 1920s as a British Historian called David Ferriby writes “by 1929 going to the movies has became a national habit and 110 million people were going to the cinema each week” Going to the cinema became a popular habit for Americans because it was easily accessible as people had more cars and movie theatres were everywhere. People would go to the cinema to escape their busy lifestyles and watch films that were an accurate reflection of American life. Also going to the cinemas allowed Americans to see films where they could just escape their busy life and imagine a whole other life. Ernst Lubitsch a Hollywood film director said that “American audiences were most interested in what cutlery to use, what hairstyles to wear and how to mix cocktails.” Films like these showed people how to behave and influenced the way they lived their lives. Ordinary citizens wanted to be like their heroes and so movie stars made films that would influence normal people’s lives and make a change in society. All the films made in Hollywood were exported all over the world and this helped the USA to become economically successful because countries would pay America for the right to play their films in their own country. Entertainment was a key part of America’s economic success because people had more time as a result of consumer goods and wanted to be entertained. Some of the entertainment relied on buying goods like radios and TVs; others would pay for the entertainment for example going to the cinema, however they all had one thing in common; they all added money back in the economy.

To conclude, I think that the policies of the Republican Party were important for America’s economic success in the 1920’s to an extent. I however feel that they weren’t the most important factor that contributed to America’s success because even though they helped businesses grow and expand, policies such as the Fordney McCumber Act did the most damaged to America’s economy in the long run. I believe that the most important reason for America booming in the 1920s was advertising. Advertising created an increase in employment, as there was an increase in demands for good, the increase in employment increased wages, which caused people to buy more products and so this cycle of prosperity due to advertising continued through out the 1920’s I think that life in the USA got better because of advertising because people had everything they needed to make them happy such as all the consumer goods. People wouldn't have all of these things without advertising as they wouldn’t have known how useful that product could be. Without advertising, mass production wouldn't have been possible as people needed the products that were being produced, businesses wouldn't have grown, the cinema wouldn't be successful and America wouldn’t have boomed. “Advertising makes new thought, new desirers, and new actions. It is the most powerful influence in adapting and changing the habits and the way of life affecting what we eat what we wear and the work and play of the whole nation” (Calvin Coolidge) To me this quote sums up just how important advertising was to the contribution of America’s economic success in the 1920’s

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