The Fragile Economy In The 1920's
Dylan Stone-Miller
1/22/07
The Fragile Economy of the 1920's and 30's
Post WWI and the Roaring Twenties
Prior to the roaring twenties the global economy was unstable. World War I had created fragile trading bonds between the U.S. and many countries, war reparations needed to be paid by the countries that lost the war, countries such as Germany and Great Britain were indebted to the United States, and, as we know well, wars cost money. The economy was weakened and the developments made in the 1920's didn't help to rebuild it.
The money that was earned during the twenties was poorly distributed with the top one percent of the population having about 32 percent of all the wealth. This meant that the rest of the population was extremely …show more content…
so eager investors jumped right into the stock market. People began to borrow money because they could now afford the lower interest rates. They took the borrowed money and invested it on margin putting them more into debt. When they bought on margin they would get ten times the stock that they originally bought for and would owe money to the stock market for the 90% they didn't pay for yet. The market appeared to be doing extremely well but all that was invested was debt. Once Strong lowered interest rates again in 1927 to help the struggling England, another boom was set in motion in the stock market. A frenzy of margin investments brought the stock market to its peak on September 3rd, …show more content…
The war had erupted in Europe with the invasion of Poland by Germany and all the countries involved looked to the U.S. for supplies. Everyone went back into the to make guns, food, and other various war supplies. The employed now had better paying jobs and the unemployed now had guaranteed jobs. The economy was looking up.
After Pearl Harbor was bombed the U.S. entered the war and with 10 million enlisted soldiers. Now that 10 million competing job seekers were off at war, the population that didn't ship off was left with a greater chance of getting a job. There were also more jobs being offered because of the much-needed war supplies that were being produced in the American factories.
The proper funding was coming into the U.S. to bring us out of the depression. Prices were back up and the demand kept up with the supply. Soldiers and factory workers kept their job through the war and with the American victory the country remained with little war-debt. The economy boomed with the return of the soldiers. http://mutualfunds.about.com/cs/1929marketcrash/a/black_tuesday.htm, Woodard,
1/22/07
The Fragile Economy of the 1920's and 30's
Post WWI and the Roaring Twenties
Prior to the roaring twenties the global economy was unstable. World War I had created fragile trading bonds between the U.S. and many countries, war reparations needed to be paid by the countries that lost the war, countries such as Germany and Great Britain were indebted to the United States, and, as we know well, wars cost money. The economy was weakened and the developments made in the 1920's didn't help to rebuild it.
The money that was earned during the twenties was poorly distributed with the top one percent of the population having about 32 percent of all the wealth. This meant that the rest of the population was extremely …show more content…
so eager investors jumped right into the stock market. People began to borrow money because they could now afford the lower interest rates. They took the borrowed money and invested it on margin putting them more into debt. When they bought on margin they would get ten times the stock that they originally bought for and would owe money to the stock market for the 90% they didn't pay for yet. The market appeared to be doing extremely well but all that was invested was debt. Once Strong lowered interest rates again in 1927 to help the struggling England, another boom was set in motion in the stock market. A frenzy of margin investments brought the stock market to its peak on September 3rd, …show more content…
The war had erupted in Europe with the invasion of Poland by Germany and all the countries involved looked to the U.S. for supplies. Everyone went back into the to make guns, food, and other various war supplies. The employed now had better paying jobs and the unemployed now had guaranteed jobs. The economy was looking up.
After Pearl Harbor was bombed the U.S. entered the war and with 10 million enlisted soldiers. Now that 10 million competing job seekers were off at war, the population that didn't ship off was left with a greater chance of getting a job. There were also more jobs being offered because of the much-needed war supplies that were being produced in the American factories.
The proper funding was coming into the U.S. to bring us out of the depression. Prices were back up and the demand kept up with the supply. Soldiers and factory workers kept their job through the war and with the American victory the country remained with little war-debt. The economy boomed with the return of the soldiers. http://mutualfunds.about.com/cs/1929marketcrash/a/black_tuesday.htm, Woodard,