Summary: UNITED STATES AT THE DECADE 1920

Summary: UNITED STATES AT THE DECADE 1920
 PROSPERITY AND CRISIS - THE CRACK OF THE NEW YORK STOCK EXCHANGE : Implications

After the First World War, the United States had emerged as first power in the world order . The military conflict caused him huge profits as a supplier of European countries winners and losers. During the war this country began an isolationist policy towards European problems.

During the 1920s economic growth was remarkable : industrial production reached the highest level in the world. Main producer and creditor, the factors that drove the American economic development were:

􀀀 Awesome car production for the domestic market and export. The auto industry drove the construction of roads , tire , batteries , fuel, repair facility and the expansion of tourism .

􀀀 Urbanization with building skyscrapers, shopping and financial centers and the emergence of new cities.

􀀀 The movie industry . In Hollywood movies that were exported to many countries is filming , while diffused in the world the American way of life , generating admiration for the level of comfort that had its population.

􀀀 The spread of a new form of work organization in American factories : Fordism , so named because its founder was Henry Ford's automobile manufacturing .

In the late nineteenth century was Frederick Taylor devised a system that was to break down the production process in very simple steps to take care that each worker only a stage of product development . He intended to reduce manufacturing time and increase production yield and thus profit of the company. That task was repetitive throughout each working day , thus achieving automation and speed. Fordism , method that takes the base of Taylorism , incorporates the assembly line (presented by Henry Ford in 1918 ) resulting in mass production and the machine and went to set the pace of production.

The tape operator went ahead and forced him to respond with rapid and precise movements in the task.

The most obvious signs of American prosperity of the '20s were:

􀀀 The big gains of entrepreneurs and growing market and real estate investment .

High wages 􀀀 population in general that allowed you to access new items.

􀀀 The great development of innovative systems favored consumption with credit sales , fees and advertising. So the industry of household appliances such as radios, refrigerators, washing machines , vacuum cleaners and drove motorcycles , among others.

􀀀 The increasing deployment of vehicles and agricultural machinery in general. Excavator, vans and cars were typical examples of American prosperity.

THE CRACK OF THE NEW YORK STOCK EXCHANGE : Implications

In the course of the 20s buying shares on the stock was transformed into one of the activities that yielded more profit. A late prosperity, a few years ago was based on industrial development, became dependent on the stock market speculation .

Despite all this the bag was still growing , and stock prices did not reflect the true state of the economy , which was in outright recession.

Although the growth of some companies had stopped, his actions were still up because there was a great demand from speculators.

In October 1929 the New York Stock Exchange broke ( crash on Wall Street) and the crisis spread to the banking system , industry , trade and American agriculture.

The consequences of the crash on Wall Street that were felt until the Second World War were:

􀀀 Domestically , industry closures , mass layoffs of workers, widespread poverty, picture that contrasted sharply with the splendor of the previous years.

Externally 􀀀 order, the crisis was felt worldwide , especially in Europe. Is that the world economy had achieved a high level of integration and the effects of the crisis were expanding rapidly.

Among the signs that showed the growing weakness of the U.S. economy may be mentioned :

􀀀 Wages stagnated , and therefore consumption slowed .

􀀀 Items began to accumulate in plants by decreasing consumption .

􀀀 Companies began to lay off workers because they had to reduce production .