The Breakdown Of America In The 1920's

At the end of the 1920s there was a huge imbalance between the rich and the poor: 0.1 percent of society earned the same total income as the bottom 42 percent.6 This imbalance, combined with production of more and more goods and rising personal debt, would soon doom our country. When giving his state of the union address in 1928, President Calvin Coolidge remarked that "America had never been met with a more pleasing prospect than that which appears at the present time.”7 The next year, Economist Irving Fisher claimed "stock prices have reached what looks like a permanent plateau."8 These statements were optimistic but misguided. In the summer of 1929, the economy faltered as a result of oversupply in many industries; more goods were being made than were being sold. The areas of the …show more content…
Speculators who hadn 't lost all their money in the crash couldn 't resist buying stocks while the prices were so low. Feeling this was their chance, many poorer people who couldn 't usually afford to invest showed up at brokers offices eager to buy. Unfortunately this recovery was short lived. Less than a month later, the stock market again took a turn for the worse. The Dow fell once again, erasing almost all its gains since 1928.20 Many speculators, previously some of the wealthiest people in the country, had to change their lifestyles, selling their homes and most valuable luxuries. The number of unemployed workers, already high, began to rise. Consumers were forced to cut back on purchases. Department store sales, radio sales, and car sales fell. Products that had previously represented the prosperity of the twenties became hard to come by. Stocks continued to fall through October and into November, finally bottoming out on November 13th, 1929. The market recovered for a few months, but soon relapsed, and along with the rest of the country slid into the Great