The Great Depression Of The 1920 S - 1385 Words

Following WW I in the 1920’s, there was a decade of an economical explosion. The post-war era brought about many changes. Businesses showed great profits, migration to big cities of industrial companies occurred with the hopes of making a better life, people were given the opportunity to purchase things on credit, while others borrowed money making poor decisions buying high priced stocks with the intention of selling stocks for a profits to repay lenders. When Black Tuesday occurred on October 29, 1929, this marked the beginning of the Great Depression that left devastating economic hardships for the American people. Although it was always my belief that the stock market crash was the sole contributor of the Great Depression, there was†¦show more content†¦S. and other countries that had industries charged high import taxes on good that were offered for sale. These taxes prevented counties from selling the goods they needed to earn the money to repay loans to the U.S . banks. In a three year period over 9,000 banks went bankrupt or had to close their doors to avoid bankruptcy which led to a decline in purchasing powers. When the banks started failing people lost their saving because the banks were uninsured. The banks weren’t as willing to offer new loans. At the same time this was occurring, there was the distribution of unequal income. Businesses were showing great profits during the 1920‘s, however the working class only got a small portion of this wealth with their low wages. People with low incomes purchased merchandise on credit. People thought that they had more money to spend on materialistic possessions using credit. Advertising increased, enticing people with the â€Å"buy now, pay later† slogan which in turn caused many consumers to accumulate so much debt that were unable to keep up with payments on the items they purchased, and they were repossessed. Once the slowing of manufactured goods occurred, inventory accumulated and there was a backlog of purchasing merchandise which caused even less spending that didn’t help the economy. Another problem contributing to the Depression was the epic drought that occurred in 1930. During WWI, thousands of farmers migrated to the Great Plains area because of its rich