The Stock Market Crash Of The 1920's

The topic of the stock market crash, is one that brings many theories and ideas to the true cause of the American economy downfall in the late 1920s. Foremost, the American economy suffered drastically following the conclusion of WWI, many lived under the assumption that the new era of the 1920s was full of economic opportunities, which caused over production of goods creating lasting effects on the economy. In addition, Americans had a false sense of security in local banking systems, stock prices soared when millions of Americans invested their money into banks and the opportunity the stock market had to offer. As well, the accumulation of faulty government policies, made it harder for overseas exports, and the failed attempts to save to
For example, the changes in technology created a desire in the hearts of Americans to purchase goods they normally would not be able to afford, thus creating the idea of purchasing items on credit. Likewise, the mass production and assembly lines in the automobile industry completely changed the way Americans saw the world, now they could travel far distances in a reliable car, but the majority of Americans acquired their cars by paying installments through credit, because they were living above their means. Lastly, when Americans began purchasing large items on credit such as home appliances, cars, and radios this act completely altered the American economy and the way money was spent, citizens no longer purchased because of need they purchased because of
To elaborate, the Fordney-McCumber tariff was accepted as a way to make overseas exportations of products to the U.S. more difficult. The tariff initially created vast amounts of income to the United States, creating a hefty $12 billion in revenue, but increased the gap of uneven wealth among the American classes. Also, the addition of mass production made farmers and laborers suffer the most during these times. Prices on produce continued to fall throughout the end of the 1920s creating a new debt to farmers. As a response, farmers attempted to save themselves by growing more crops and increasing their cattle production which only continued the downward effect of the slowing economy. Another relief effort was extended to farmers called the McNary-Haugen Act, the government attempted to support farmers by buying basic farm essentials in an attempt to sustain crop prices. Although government attempted to help by creating new relief efforts, in the end they only harmed America by making products harder to sell and decreasing the income and money supply to the