Why Did Some Industries Prosper in the Boom? (Cambridge (CIE) IGCSE History): Revision Note

Summary

The 1920s are often described as a golden age for the American economy. Powered by the newly emerging motor industry, cities across the US reflected the post-war explosion in wealth with their towering skyscrapers. But not all industries prospered. Newly invented fabrics took customers away from the traditional wool and cotton manufacturers. Also, with more American homes being connected to the electricity grid, the demand for coal fell.

Prosperity of new industries

• The success of the motor industry during the 1920s had a positive knock-on effect on other industries

  • It increased the demand for steel, glass, rubber and leather 

  • New jobs were created in those sectors

• US companies such as Dupont manufactured new synthetic fabrics, such as rayon, which was in high demand from customers

• Many of the new businesses needed offices, factories and showrooms to be built, which caused a boom in the construction industry

  • Mass car ownership also led to the expansion of the road network, which further helped the construction industry

Decline in traditional industries

• The fashion for synthetic materials led to a slump in demand for cotton and woollen textiles

  • This affected both the farmers who produced the raw materials and the mills that turned them into cloth

• The increased use of electricity, gas and oil to heat US homes led to less demand for coal

  • This led to the closure of mines and the loss of jobs

• The end of World War I also led to reduced demand for ships

  • The shipbuilding industry declined, which led to further job losses

• The increase in car ownership meant the railways also declined