America in the 1920'south

The powerful economical might of America from 1920 to Oct 1929 is frequently overlooked or simply adumbral by the more exciting topics such every bit Prohibition and the gangsters, the Jazz Historic period with its crazies and the Klu Klux Klan. However, the strength of America was generated and driven past its vast economic power.

In this decade, America became the wealthiest country in the world with no obvious rival. Yet past 1930 she had hit a depression that was to have earth-wide consequences. But in the good times most everybody seemed to have a reasonably well paid job and virtually everybody seemed to take a lot of spare cash to spend.

I of the reasons for this was the introduction of hire-purchase whereby you put a eolith on an item that you lot wanted and paid installments on that item, with involvement, and then that you paid back more than the cost for the item simply did not have to make 1 payment in 1 go. Rent-buy was easy to get and people got into debt without any real planning for the future. In the 1920's it simply seemed to be the case that if you wanted something then you lot got it.

Only simply buying something had a major economic impact. Somebody had to make what was bought. This was the era before robot engineering science and nearly work was labour intensive i.e. people did the work. The person who made that product would get paid and he (every bit information technology usually was in the 1920'south) would not save all that money. He, too, would spend some of it and someone somewhere else would take to brand that and and then he would get paid. And so the cycle connected. This was the money flow belief of John Maynard Keynes. If people were spending, then people had to exist employed to make things. They go paid, spent their money and so the cycle connected.

A good case was the motor motorcar industry. The iii big producers were Ford, Chrysler and General Motors.

A boom in the car industry came from Ford's with the legendary Ford Model -T.

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This was a car for the people. Information technology was cheap; mass product had dropped its price to simply $295 in 1928. The same car had cost $1200 in 1909. By 1928, just about 20% of all Americans had cars. The impact of Ford meant that others had to produce their own cheap car to compete. The benefits went to the consumer. Hire-buy made cars such equally these very affordable. Merely there were major spin-offs from this one industry every bit xx% of all American steel went to the auto industry; 80% of all safety; 75% of all plate drinking glass and 65% of all leather. 7 billion gallons of petrol were used each year and, of course, motels, garages, restaurants etc. all sprung up and all these outlets employed people and these people got paid.

To cope with the new cars new roads were built which employed a lot of people. Only not everybody was happy with cars. Critics referred to cars as "prostitution on wheels" as young couples courted in them and gangsters started to use the more powerful models as getaway cars after robberies. But cars were definitely here to stay.

Not only were cars popular. Radios (ten 1000000 sold by 1929), hoover'southward, fridge's and telephones sold in huge numbers.

By 1928 even the president, Hoover, was challenge that America had all but rid itself of poverty. The nation was fulfilling a previous president's pronouncement: "The business in America is business concern" – Calvin Coolidge.

But ii groups did not prosper at all :

1) The African Americans were forced to do menial labour for very poor wages in the southern states. They lived lives of misery in total poverty. The KKK made this misery worse. In the northern states, decent jobs went to the white population and discrimination was merely as mutual in the northward as it was in the South (though the Klan was barely in existence in the north and the violence that existed in the South barely existed in the north) and many blackness families lived in ghettoes in the cities in very poor weather condition. In the 1920's the blackness population did not share in the economic boom. Their only real outlet was jazz and dancing though this was washed to entertain the richer white population, and sport, especially boxing.

2) The share croppers of the due south and mid-Americas. These people rented out state from landlords or got a mortgage together to purchase land to farm. When they could non afford the rent or mortgage payments they were evicted from the land. There was such a massive boost in food production that prices tumbled as farmers desperately tried to sell their produce and failed. The European market was out of the question. Europe had retaliated at tariffs on their products going into the American marketplace by putting tariffs on American goods destined for the European market thus making them far more expensive – this included grain. Many farmers in the mid-west lost their homes. Single male farmers became the legendary hobos – men who roamed the mid-American states on trains looking for part-time work.

These 2 groups were frequently forgotten in the "Jazz Historic period". To many people, they were "out of sight and out of mind". It appeared that everybody had money – even factory workers and shoe-shine boys on urban center streets. In fact, people had spare money with nothing to do with it. They invested whatever they could in the Stock Market in Wall Street, New York. In that location were huge fortunes to be made hither and many invested coin they could ill afford to lose. However, the lure was too corking and everybody knew that at that place was coin to be made.

Stockbrokers were at fault as they were happy to have a 'margin' to purchase shares for a person ; this was accepting merely 10% of the cost of the shares that were to be purchased for a customer. The rest was to be collected when the toll of shares went up – equally they would, of class…. By 1929, over 1 meg people endemic shares in America.

In Oct 1929, the Wall Street Crash occurred. Its impact was felt worldwide.