How Did The Great Depression Affect The Economy In The 1920s

During the 1920s, the American economy boomed. Ford was mass producing motors, people were buying more goods (mostly on hire) and there was even an increase in people investing in the stock market. The boom meant incomes rose and living standards improved for a lot of people, but, not all. Source 21 quotes Herbert Hoover saying ‘We are nearer today to the ideal of ending poverty and fear than ever before in any land’. The Republican government reduced income tax, meaning more money could be spent on goods; this coupled with low interest rates, meant people had more money to spend.

Between 1920 and 1929, 15 million more automobiles were produced. By 1925, there was one ford car being manufactured every 10 seconds. In theory, more sales meant

Jazz was associated with ‘American Flappers’, a woman who portrayed herself as one who wore short dresses, make up and smoked in public. Source 5 shows an explanation of how a flapper saw her life. To summarise the source, flappers had ‘nerve’. They didn’t need a man to provide money for them because they had their own. Also, more women were working by the 1920s, with an employment increase of 25%. However not every woman enjoyed the flappers way of life. Many were not even able to afford the new clothes. Some didn’t even get the time to be able to go and enjoy time like a flapper would. So, young rich women were able to benefit from life as a flapper as shown in source 6 referring to how a flapper dressed.. However, the elderly and many religious people went against these changes. People in poverty were unable to afford the

Industries such as the coal industry, leather industry and the textile industry went into decline. 500,000 farmers went bankrupt. Around 40% were below the poverty line. Primary sector workers earned a third of the national average. In 1928, many coal workers went on strike, as their pay was not sufficient to enable them to live a decent life.

The policy of the Republican Party meant there would be no government support for the poor and unemployed. Also, literacy tests were introduced in 1917. If an immigrant couldn’t pass the test, they would be refused entry.

Around a million black workers lost their jobs in the 1920s, as a result they were put into low pay jobs. This was all because the population was growing fast. Source 29 from C K McDonald says that ‘The average wage in the north east was $881 per year. In the south east it was $365 per year. Millions of Americans continued to live in poverty’. This suggests a contrast between the standards of living with those in the north and south. People in south had half the wages of those compared to the north. The quote refers to the early 1920s, showing that not all had benefited from the boom. Also, the Laissez-faire bought lower taxes. There was a high introduction of new technology including audio devices. There were also more advertising and sales methods, especially billboards and radio adverts. Hire was in fashion and people were paying off goods in