Boom and Bust in the U.S. and World Economies Fueled by easy money the nineteen-twenties were boom times like never before. The post-war recession was forgotten as everyone went on a spending spree. Credit, and not savings, enabled consumers to boost corporate profits to new levels.
The 1920's saw new discoveries and inventions in nearly every field of endeavor that became the foundation of thriving businesses. Patent attorneys did a roaring trade and nearly every man fancied himself as an inventor if the number of patent submissions was anything to go by.
New business and production methods allowed manufacturers to make large profits which they plowed back into new factories and wage rises. Department store and service station chains used massive buying power and operating efficiencies to lower prices while increasing service and choice, helping wages to go further. Henry Ford used his huge buying power to setup discount grocery stores for his employees, much to the annoyance of local store owners.
Increased incomes, along with the introduction of credit with no credit card processing fees until years later, funded a huge increase in consumer spending. Only some of the increased affluence found its way into insurance as a provision for retirement.
People living in the cities and areas of industry benefited most from the increased prosperity although there were arguments to the contrary. Those living in rural areas did not benefit to the same extent, and this was made worse by widespread drought. This encouraged population movement from rural areas to cities, a trend which has continued down to the present day. In 1926 alone the Department of Agriculture calculated that the nett migration in favor of the cities was over one million people.
Shoppers were able to buy big ticket consumer items like cars, fridges, washing machines, pianos, vacuum cleaners, furniture, and radios on time payment. Previously, these expensive items were only affordable by the wealthy. Once one maufacturer or retailer offered instalment purchases the competition were forced to follow suit. About half of all instalment debt was for automobiles. It was estimated that 75 per cent. of all automobiles, 85 or 90 per cent. of all furniture, 80 per cent. of all phonographs, 75 per cent. of washing-machines, 65 per cent. of vacuum cleaners, 25 per cent. of all jewelry, and the greater part of all pianos, sewing-machines, radios, and electric refrigerators, were sold by partial payment. About $140,000,000 worth of clothing was also sold per annum on this plan. When British manufacturers saw how instalment selling had boosted American business they introduced "buying on tick" to Great Britain.
http://www.1920-30.com/business/
The 1920's saw new discoveries and inventions in nearly every field of endeavor that became the foundation of thriving businesses. Patent attorneys did a roaring trade and nearly every man fancied himself as an inventor if the number of patent submissions was anything to go by.
New business and production methods allowed manufacturers to make large profits which they plowed back into new factories and wage rises. Department store and service station chains used massive buying power and operating efficiencies to lower prices while increasing service and choice, helping wages to go further. Henry Ford used his huge buying power to setup discount grocery stores for his employees, much to the annoyance of local store owners.
Increased incomes, along with the introduction of credit with no credit card processing fees until years later, funded a huge increase in consumer spending. Only some of the increased affluence found its way into insurance as a provision for retirement.
People living in the cities and areas of industry benefited most from the increased prosperity although there were arguments to the contrary. Those living in rural areas did not benefit to the same extent, and this was made worse by widespread drought. This encouraged population movement from rural areas to cities, a trend which has continued down to the present day. In 1926 alone the Department of Agriculture calculated that the nett migration in favor of the cities was over one million people.
Shoppers were able to buy big ticket consumer items like cars, fridges, washing machines, pianos, vacuum cleaners, furniture, and radios on time payment. Previously, these expensive items were only affordable by the wealthy. Once one maufacturer or retailer offered instalment purchases the competition were forced to follow suit. About half of all instalment debt was for automobiles. It was estimated that 75 per cent. of all automobiles, 85 or 90 per cent. of all furniture, 80 per cent. of all phonographs, 75 per cent. of washing-machines, 65 per cent. of vacuum cleaners, 25 per cent. of all jewelry, and the greater part of all pianos, sewing-machines, radios, and electric refrigerators, were sold by partial payment. About $140,000,000 worth of clothing was also sold per annum on this plan. When British manufacturers saw how instalment selling had boosted American business they introduced "buying on tick" to Great Britain.
http://www.1920-30.com/business/