How important were credit and hire purchase as reasons for the economic growth in the USA in the 1920s?

In the 1920s it was known as a period of boom in the United States due to the fact that the country was one of the biggest or the biggest country. Credits is when the bank lends money to the people in the form of a loan, and hire purchase is a method of buying goods through making instalment payments over time. This factors Were important because people spent more money, however it were not the only factors that made the country economic growth.

One of the reasons of the economic growth in the United States, were credits and hire purchase. Poster and radio advertisings encouraged people to bought, despite of people had not the money they could borrowed it easily. Low income families with the credits and the hire purchase can bought thinks such as cigarettes, cloths and more things. People took advantages on the method “Buy now, paid later” that was hire purchase method. Hire purchase were used my many films such as Motor industry that in 1929 4, 8 million cars were made. In 1920, banks could loan money to people because the confidence was high, and people trust on banks and gave the banks there savings and this made the credits increase.  Also, it seemed that this new methods were and easy and quick way to get rich, so many Americans joined to this methods of buying shares watch their values rise and then sell the shares later in at a higher price. Speculators were an example, they could buy “On margin”, this mean that they had only to put down the 10 per cent of the cash needed to buy shares and borrow the rest, and with the profit they were allowed to invest in companies.

In the other hand there were more reasons that made economic growth. For example the republicans’ beliefs were really important in this growing. They believe in 4 things, the first one is the Laissez-faire, this mean that the government interfere a little in the everyday lives of the people. The second is Tariffs, they believed in import Tariffs which made expensive to import foreign goods. The third is Low taxation, the taxation were as low as possible. And the last beliefs was trusts, they allowed this, it means that were corporations that dominates industry. Moreover the Usa leader in many industrial sectors, in steel, coal and textile industries for example. It was the leader of oil production, it was the country that more developed the new technology. They sold their product in Usa, Europe, Latin America and the Far east.  Furthermore the First World War helped, due to the fact that the United States were able to the took over Europe´s trade around the world. The Usa also outstripped Germany in the supply of chemical products. This world made the American produce plastics and other new materials, and electrification was essential to made that. There were advertisings campaign to made people bought the consumer goods. And this made the state of mind change and it was good seen to spend a lot of money. 

To conclude we can said that the Usa was practically focused on making people buy a lot it and hire purchase and credits were really important on that. It is clearly that this factors played an important role in the economic growth, but as we see there not the only ones.