During the 1920s consecutive Republican governments introduced policies that contributed to the economic boom. However The First World War also had a very stimulating effect on the American economy. Whilst European countries were busy fighting against each other, American businesses saw the opportunity to take over their trade and sell more goods for high profits. As European farmers struggled to grow crops for food and European manufacturing ceased, American businesses were able to sell food and supplies abroad due to the increased demand. America also loaned money to cash strapped Britain and France during the war, which they subsequently had to pay back with high interest. This lead banks to invest more money back into American businesses. America was the leading industrial nation after World War 1 because its economy had not been damaged like most of the strong European countries. The USA also had vast natural resources and a growing population. This confidence in the American economy encouraged more businesses to invest and the supply and demand cycle continued. Government policies helped capitalise on this demand for American industry. The government at this time had a very Laissez-faire attitude. This meant that they were quite relaxed with what went on with American businesses in the 1920s. Both Presidents Calvin Coolidge and Herbert Hoover felt that they should interfere as little as possible in the everyday lives of the people. For businessmen this meant that they could get on with their job and prosper. Industry at this time was dominated by Trusts. These were huge super-corporations. Republican Politicians allowed the Trusts to do what they wanted, believing that the captains of industry knew better than politicians did. Another key factor in the growth of the American economy was the fact that the Republicans kept the taxation as low as possible. This meant that ordinary people had more money to spend in their pockets than usual but it brought...