The 1920s And Americ The Causes Of The Great Depression

Decent Essays

The 1920s was known as the “roaring twenties” in the United States, for the first time more Americans lived in cities than in farms, and America had the biggest economy in the world. With the destruction wrought brought by the First World War, Europeans were struggling while Americans flourished. The president at the time, Herbert Hoover, even predicted that soon poverty would be eliminated. Everyone thought that the balloon of prosperity would just keep expanding, then balloon popped and everything tumbled down, and the U.S. entered into its deepest, longest economic crisis known as the Great Depression. But it was avoidable, through good leadership and sensible regulation, the disaster could have been prevented. During the twenties, getting …show more content…

It was the long-term fundamental issues that resulted in the collapse. American companies reached record profits during the 1920s and reinvested much of these funds into expansion. By 1929, companies had expanded to the bubble point. Workers could no longer continue the expansion, and a slowdown was unavoidable. As corporate profits went through the roof, so did the wages. However, the workers were not keeping pace with the increase in the cost of living or the wealth in the hands of the industrialists and others in the upper income classes. The richest one percent of Americans owned over a third all American assets. Wealth concentrated in the hands of a few limits economic growth. The wealthy tended to save the money that could have been put back into the economy if it were spread among the middle and lower classes. …show more content…

Banks operated without assurance to their customers, causing an atmosphere of panic after the crash. Little regulations were fixed on banks as they lent money to those who speculated heedlessly in stocks. Farmers abused land, they used up the fertile and moved on, chopping down trees and cutting up sod. As a result, droughts and wind storms occurred and turned the land into desert. Prices for agricultural products had already been low during the 1920s, combined with the drought farmers were unable to set off any sort of recovery. When the Depression spread across the Atlantic, Europeans bought fewer American products, worsening the

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