How Successful Was The Economy In The 1920's

By 1918 the USA was the wealthiest and most powerful country within the world due to the various conditions that will be discussed within this essay, such as: Its rich natural resources, the thriving capitalistic economy boosted by profits made during The First World War, the institution of the assembly line which introduced mass production, new technologies and the unrestricted buying of shares on the Stock Exchange. In contrast by 1929 the USA was undergoing the Great Depression due to overproduction, a collapse of the Stock Market, unsound business practices leading to a decrease in the flow of money, bank failures, reduction of sales across the board, and problems in trade.
The USA was a country with a larger amount of land than most European

Further growth was promoted by the creation of the assembly line by carmaker Henry Ford which introduced the concept of mass production. The assembly line managed to cut costs and quicken production to the point where the cost of a Model-T Ford went down by five hundred dollars in the span of twelve years.
The enormous expansion of the motor industry directly affected other industries. Glass, rubber, wood and roadwork’s industries were stimulated as further demand for their products and services was created. More jobs were created, wages were increased as factory costs decreased, and more goods were being produced for cheaper and thus the circle began.
Mass production created what seemed to be a never ending circle which provided comfort and financial security to most citizens. Increased production led to increased employment, which meant more money was available to spend on consumer goods, thus demand for consumer goods increased, which led to increased production and the cycle goes on. Most business owners and citizens believed this cycle of constant growth would continue on

The Great Depression was a global financial crisis originating in the USA which resulted in the loss of billions of dollars, millions of jobs, and which threw America into a state of national poverty.
A critical fault leading to the Great Depression was overproduction. This overproduction was not only centered on manufacturing but on agriculture as well. Farmers had mechanized during WW1 and the European markets which they had relied on had dried up at the end of the First World War. This meant that many farmers were still in debt from purchasing the machinery but also that many people were laid off as the demand for fresh produce lowered and machines replaced people’s jobs. This created a decrease in the production of food and a rise in unemployment for hundreds of thousands of farmers in the early 1920’s.
Industry which was soaring in the 1920’s and saw many a citizen buying lots of things, especially consumer products. Importantly, however, many of these were bought on credit. Production continued to gallop ahead, and the market inevitably began to dry up as people quickly had one of everything, and there were too few people earning enough money to buy all the products. A mass surplus of products that could not be sold was