Collapse Of The American Stock Market Analysis

1941 Words 8 Pages
The collapse of the American stock market in 1929 is considered by most historians to be the catalyst that set in motion the worst economic event in modern history, but it didn’t happen overnight. There were several problems in American culture through the “roaring twenties” that many chose to ignore; and it’s because of this negligence that the fun and free American way of life of the time met its terrible end. The numerous issues facing American agriculturists during this time, overproduction in manufacturing, unequal distribution of wealth, and poorly designed bank systems set the shoddy groundwork from which the American economy would go crashing down. The habits that America fell into during the Great War carried on into the 20’s and 30’s …show more content…
Times were good. Starting around the late nineteenth century, America had established a culture of ingenuity and technological advancement for itself. It seemed determined to become the new world technological leader. Out of this culture and mindset arose an age of transformation -- an an age of invention. American industry suddenly began pumping out the latest and greatest inventions, and rumors of the nation’s bustling economy and opportunity spread internationally. At this time more than ever, immigrants flooded in from across the Atlantic looking for jobs in America’s many factories. Due to new inventions and technologies that arose out of this age of invention, American industry was capable of producing more than ever. From 1923 to 1929, American industrial output rose by more than thirty percent, and it showed no signs of slowing down. Manufacturers began finding ways to produce their products for cheaper, and faster, in order to appeal to the average consumer. Again, due to the age of invention, American cities and homes were becoming electrified to accommodate the new electronic, time saving home appliances that were being pumped out of the nation’s factories. For most American’s during this time, there was little money left over after paying for a family 's necessities such as rent or food, …show more content…
In fact, during this time, the divide between the rich and the poor began to grow steadily. This maldistribution of wealth has characterized much of the history of America; the majority of the populace hold very few material goods and have no way to become richer, while a very select few of the population harbor tremendous amount of wealth, and are determined for it to remain in their pockets. When the rich hold onto their assets, and don’t allow their income to flow into the economy, then the only people participating in the nation’s economics are those who can only by acquiring tremendous debt. The top one percent of the population held a combined income that was equal to the total income of the lower forty two percent. In the 1920’s alone, the disposable income per person rose only about nine percent. However, the top one percent of the populace’s disposable income saw a rise of around seventy-five percent. One major cause of this divide in income between the very rich and the rest of the nation was the incredible divide in their wages. While it’s true that American factories were more productive than ever, and that their employees had never worked so hard, their wages didn’t even rise ten percent. While all this was happening, prices for consumer goods remained generally the same, and the expenses involved in producing those goods plummeted as items were produced on a

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