The Roaring Twenties
American political leaders of the 1920’s were not directly responsible for the Great Depression; the government contributed to many of the factors that led to the Great Collapse, but the burden of this event was on the citizens of the U.S. who abused consumer credit, acted in their own selfish interests, and lost economic confidence. The 1920’s is known as the “Roaring Twenties.” The standard of living had greatly improved from the century before it. American citizens enjoyed shorter work hours and weeks, while also appreciating an increase in salary. The stock market values were continually rising. Moreover, a cultural change was also taking place. People all over the country were united through the same songs, dances, and movies. Women began
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In the 1930’s, President Herbert Hoover strongly believed that in order to maintain a healthy economy, the citizens must invest into it and act in the interest of the country as a whole and not individually. Even before the great collapse, farmers acted in their own interests. World War I created a high demand for crops. Farmers took out loans to expand their farms and to buy more equipment. Agricultural profits peaked. After the end of World War I, the demand for goods fell significantly. Farmers were left with an abundance of unsold crops. Consequently, prices began to fall drastically on the products. For the good of the economy, the best plan would have been to stop growing and selling all of the excess crops. Instead of acting as whole, the farmers of the 1920’s tried to compensate the loss of profit and match their original price by growing even more goods. Consequently, this unnecessary production caused the prices to drop even lower. Soon the meager profits that farmers made were not enough to pay off the debts of the land obtained in the war. Many family farms were repossessed due to unpaid mortgage and bills, creating a rural depression. Farmers did not enjoy the successes of the 1920’s as other citizens did. Another aspect of acting individually instead of as a whole was the result of the Reconstruction Finance Corporation (RFC) in 1932. The RFC granted loans to businesses and banks to initiate reform. With this investment of money, the goal was to hire more workers and increase loans. In theory, production and consumption would increase while the depression would slowly end. This type of reform was known as the trickle-down theory. However, this theory did not help to end the depression. Instead, the money invested into the RFC by the government was held by the businesses and banks; workers were not hired and loans were not increased. These corporations chose not to follow the
In the 1930’s, President Herbert Hoover strongly believed that in order to maintain a healthy economy, the citizens must invest into it and act in the interest of the country as a whole and not individually. Even before the great collapse, farmers acted in their own interests. World War I created a high demand for crops. Farmers took out loans to expand their farms and to buy more equipment. Agricultural profits peaked. After the end of World War I, the demand for goods fell significantly. Farmers were left with an abundance of unsold crops. Consequently, prices began to fall drastically on the products. For the good of the economy, the best plan would have been to stop growing and selling all of the excess crops. Instead of acting as whole, the farmers of the 1920’s tried to compensate the loss of profit and match their original price by growing even more goods. Consequently, this unnecessary production caused the prices to drop even lower. Soon the meager profits that farmers made were not enough to pay off the debts of the land obtained in the war. Many family farms were repossessed due to unpaid mortgage and bills, creating a rural depression. Farmers did not enjoy the successes of the 1920’s as other citizens did. Another aspect of acting individually instead of as a whole was the result of the Reconstruction Finance Corporation (RFC) in 1932. The RFC granted loans to businesses and banks to initiate reform. With this investment of money, the goal was to hire more workers and increase loans. In theory, production and consumption would increase while the depression would slowly end. This type of reform was known as the trickle-down theory. However, this theory did not help to end the depression. Instead, the money invested into the RFC by the government was held by the businesses and banks; workers were not hired and loans were not increased. These corporations chose not to follow the