Focus Question:

Explain the meaning of the following quote:

“The Business of America is Business. The man who builds a factory builds a

temple.The man who works there worships

there.”-Calvin

Coolidge

The Business of AmericaThe Conservative Resurgence of the 1920s

The Return to Normalcy

• The 1920s were a decade of reaction• America felt exhausted by the war•Many felt that progressive reforms were too fast and too furious•Many wanted a breathing space• Return the U.S. to the way it was before the

war.

Business Practices

• Government worked to assist business• Adopt a laissez-faire approach• Promote investment• Fit the conservative policies of Harding and Coolidge

Andrew Mellon• Secretary of the Treasury, 1921-1932• Major economic plan• Increase investment• Reduce the national debt

• Free up capital for investment • Promotes growth industries

• “Trickle Down Economics”

Results• Number of Millionaires tripled• More money invested in business• New construction boomed• The Stock Market Soared.

Role of Demand• Economies are fueled by Demand• If Demand is low, Supply loses importance• The 1920s demand was built by one major

industry and two lesser ones

Shifting Consumer Practices• Industrial Productivity was very high• Businesses required to sell their products• Most Americans were frugal• Avoid debt• Save money for the rainy day•Many more worked below the poverty rate

Dawn of Modern Advertising• Persuade people to buy what is not needed• Psychological approach• Approached sales with science!• Coined new terms and insecurities

Planned Obsolescence• Americans expected high quality goods• Expect goods to last• Manufacturers wanted people to buy new

products• Limit the lifespan of items• Sponsor new models with minimal shifts

Credit• People would buy without going into debt• Business had to find ways to stretch the dollar• Installment plans• Credit cards• Layaway plans

• Increased debt loads dramatically

Creation of a Consumer Culture• Americans become enamored of new gadgets• Labor-saving devices• Radios• Automobiles

• A form of materialism little seen outside the very wealthy

• Profound Impact on the country