US economy during the 1920s

In the class of history we were studying USA during the 1920s. We had to write an essay about how important were credit and hire purchase as reasons for the economic growth in the USA in the 1920s. 

During the 1920s, usa grew a lot economically speaking. There were many factors which influenced this event. Credit and hire purchase were some of the factors that helped this economic growth in the country. Borrowing money from the bank and paying in terms were very successful methods.

On the one hand, credits helped as many people that could not afford to buy a certain product such as a radio or a car, could get it through the money that the bank lent them. In this way, people spent money in the country, consequently it benefited the economic growth of USA. Furthermore, through hire purchase with the idea of “buy now, pay later”, people bought lot of things and the economy of the country grew. In addition, buying on the margin, benefited the speculators as they could buy something, earn money and then invest it. As well as, many people borrowed cash of the banks in order to buy shares, then they got profit from that shares and finally they turned into millionaires or increased their economy.

On the other hand, these were not the only reasons that benefited the economy of USA, the Republican policies played an important role too.With Laissez-faire, they let the businessman do his own job. They also introduced tariffs that made the import goods more expensive. In this way, people bought American products. As regards Low Taxation, it brought benefits to the economy as people invested their money in American goods and then reinvested in industries. There were poster advertisements and industries used sophisticated sales and marketing techniques in order to get people who buyed their goods. This also helped the growth. The state of mind that people followed at that time (spending money was right) and the production of cars (Ford) in the same way as massive production of products and selling helped the economy. At the end of the first world war, the USA had the best war chemicals and armament which stimulated the by-products that became new American industries. New products such as plastics and other new materials were produced. The WWI left the USA in most of areas of industry, new technology and electricity were developed benefiting the industry and its production.

On balance, credit and hire purchase were really important as regards the economic growth of the USA during the 1920s. Nevertheless they were not the only factors that matter, Republican policies, industries, production, new markets and improvements in technology were essential for it.