More cars were produced at a lower cost. As a result, the price of the Model T fell and more people could afford to buy them. The car industry was central to the prosperity of the 1920s. It was the first industry to experiment with mass production. It employed 5 million workers directly and millions more indirectly in support industries. The steel, oil, rubber, glass, leather and machine tool industries were only some of those who benefited from the boom in car sales.
After the war, the landscape of the USA was transformed. Economic growth led to more offices and factories being built. This, in turn, led to the building of new houses, schools, hospitals and public buildings of all kind. New materials enabled the construction of new types of building. The skylines of the great cities, for example, were transformed by skyscrapers. The car also played a part in building boom since thousands of miles of new roads were built and people began to move out to new states in the suburbs since they could travel to work in their own cars.
The USA's second industrial revolution was not planned or organised by the federal government, though the Republicans were keen to take credit for it. During the 1920s, the Republicans main aim was to give business leaders a free hand to make maximum profits. So, the regulation of business by federal agencies was reduced to a minimum. Government expenditure was kept low. Taxes were cut on high incomes and profits. And, most important, American goods were protected against foreign competitors by tariffs (taxes or "duties" on goods coming into a country). High tariffs make imports more expensive and therefore "protect" goods produced locally. The Fordney-McCumber tariff act of 1922 raised duties on foreign goods to the highest level ever known in American history (on average, adding 33% to the price of an import). This was welcomed by those who sold their products within the USA.
