American Automobile Industry

• Development of the American road system
The practicality of the automobile was initially limited because of the lack of suitable roads. Travel between cities was mostly done by railroad or waterways. Roads were mostly dirt and hard to travel, especially in bad weather. The Federal Aid Road Act of 1916 allocated $75 million for building roads, and the Federal Aid Highway Act of 1921 provided additional funding for road construction. By 1924 there were 31,000 miles of paved road in the U.S.
• The Birth of the Big Three Automakers
Henry Ford began building cars in 1896 and started his own company in 1903. The Ford Motor Company improved mass-production with the first conveyor belt-based assembly line in 1913, producing the Model T (which had been introduced in 1908). These assembly lines significantly reduced costs. The first models were priced at $850, but by 1924 had dropped to $290. The Model T sold extremely well and Ford became the largest automobile company in the U.S. By the time it was retired in 1927, more than 15 million Model Ts had been sold. Ford introduced the Model A in 1927 (after a six-month production stoppage to convert from the Model T), and produced it through 1931. However, while the Model A was successful, Ford lost ground to GM and eventually Chrysler, as auto buyers looked to more upscale cars and newer styling. Ford was also a pioneer in establishing foreign manufacturing facilities, with production in England in 1911, and Germany and Australia in 1925. Ford purchased the luxury Lincoln automaker in 1922 and established the Mercury division in 1938.