The Great American Depression
Throughout the 1920's, new industries and new methods of production led to prosperity in America. America was able to use its great supply of raw materials to produce steal, chemicals, glass and machinery that became the foundation of an enormous boom in consumer goods (Samuelson, 2.) Many US citizens invested on the stock market, speculating to make a quick profit. This great prosperity ended in the October of 1929. People began to fear that the boom was going to end, the stock market crashed, the economy collapsed and the United States entered into a long depression.
The Great Depression from the 1930's still remains today the most important economic event in American history. It caused hardship for tens of millions of people and the failure of a large fraction of the nation's banks, businesses, and farms. The 1929 stock market crash is believed to be the immediate cause of the Great American Depression; however, there were many other factors that led to the long-term development of the depression prior to the crash.
The 1920's may have been thriving for some Americans, but the growing success was actually crippling the economy. The majority of Americans had nothing to do with the growing of the economy, 60% of Americans lived under poverty. The coal mining industry had expanded considerably, generating jobs, but because of the newly introduced oil and gas, the production of coal was decreased along with available jobs. The United Mine Workers Union's membership fell from 500,000 in 1920 to 75,000 in 1928 (Temin, 33). The cotton industry experienced similar unemployment problems. In the agricultural industry, and increase in production was met with a decrease in demand, so farmers also became unemployed. The American farms and factories produced large amounts of goods and products during the prosperity before the Great Depression.
On average, people's wages stayed the same even as prices for these goods rose. The factories...
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