The United States became the first nation in history to build its way of life on selling vast quantities of goods that gave ordinary people easier and more enjoyable lives. These “consumer goods” poured off the assembly lines of big new factories. Between 1919 and 1929 such mass-production factories doubled their output.
The growth of industry made many Americans well off. Millions earned good wages. Thousands invested money in successful firms so that they could share in their profits. Many bought cars, radios other new products with their money. Often, they obtained these goods by paying a small deposit and agreeing to pay the rest of the cost through an “instalment plan.” Their motto was “Live now, pay tomorrow”- a tomorrow which most was convinced be like today only better, with even more money swelling their wallets.
Businessmen became popular heroes in the 1920s. Men like Henry Ford were widely admired as the creators of the nation’s prosperity. “The man who builds factory builds a temple,” said Calvin Coolidge, the President from 1923 to 1929. “The man who works there worships there.”
Coolidge’s words help to explain the policies of American governments in the 1920s. These governments were controlled by the Republican party. Republicans believed that if the government looked after the interests of the businessman, everybody would become richer. Businessmen whose firms were doing well, they claimed, would take on more workers and pay more wages. In this way, their growing wealth would benefit everybody.
To help businessmen Congress placed high import taxes on goods from abroad. The aim was to make imported goods more expensive so that American Manufacturers would have less competition from foreign rivals. At the same time, Congress reduced taxes on high incomes and company profits. This gave rich men more money to invest.
Yet there were lots of poor Americans. A survey in 1929 showed that half the American people had hardly enough money to buy sufficient food and Clothing. In industrial cities of the North such as Chicago and Pittsburgh, immigrant workers still laboured long hours for low wages in steel mills, factories and slaughterhouses. In the South thousands of poor farmers both black and white, worked from sunrise to sunset to earn barely enough to live on. The wealth that Republicans said would benefit everybody never reached people like these.
The main reason for poverty among industrial workers was low wages. Farmers and farm workers had a hard time for different reasons. In the South, many farmers did not own the land they farmed. They were sharecroppers. For rent, a sharecropper gave the landowner part of what he grew – often so much that he was left with hardly enough to feed his family.