In the first years of the twenties, Americans were still healing from the shock of World War I. The United States had emerged from the war as the strongest military and economic power in the world. But its economic interests were now strongly linked with other nations, especially those in Europe, so retreating to its prewar stance of isolationism — that is, staying out of international entanglements — was no longer possible.
Although Americans couldn’t return to their former uncomplicated, isolationist position, many were nostalgic for simpler times, and, as a result, the twenties developed into an almost schizophrenic decade. The U.S. economy grew rapidly, and the pace of life got quicker. Many Americans were in a lighthearted mood. They found new forms of entertainment to indulge in, as old social conventions were cast aside. In the midst of all this change, few observed the economic storm clouds that were massing on the horizon.
The Economy Surges Forward
Although the decade began with a brief recession in 1920, the economy appeared to be recovering by 1922. By 1929, the gross national product — the total value of goods and services produced — had risen to $84 billion, compared to only $75 billion in 1920. Many people took this as solid proof that an era of permanent prosperity had begun. Most Americans were proud that, in the postwar years, their nation had become an economic powerhouse. Between 1920 and 1929, overall manufacturing output rose by a staggering 64 percent. This included the manufacture of fifteen million automobiles and seven million radio sets, and the construction of well over three million new homes and apartments. In addition, during the 1920s, nearly nine million homes were wired for electricity, and as many as six million telephones were installed in America’s private homes and offices.
The Rise of the Automobile
Although many industries grew rapidly in the 1920s, the biggest symbol of American progress was the rise of the automobile industry. During this decade, production rose from 1.9 million cars in 1920 to almost 4.8 million in 1929 — one car for every six Americans. This $3.5 billion-a-year industry directly employed some 350,000 factory workers and executives and indirectly employed thousands of others, such as car salespeople, workers in tire and accessory factories, repair technicians, and filling station operators, not to mention the workers who built new highways to handle the increased traffic.
At the beginning of the 1920s, forty-four different automobile manufacturers competed for consumer dollars, but most were quickly weeded out by the stiff competition. By 1930, six companies controlled 90 percent of the business. The leading firm was the Ford Motor Company, whose owner, Henry Ford, had become successful by making the Model T affordable for the average working person or farmer. By 1927, for example, the boxy Model T cost less than $300. To compete with the sleeker Chevrolet, made by General Motors, Ford also brought out the smart new Model A in 1927. So, in 1929, Chrysler Corporation introduced the Plymouth to compete with Ford and Chevrolet.
