1920’s Recap of the Economy The decade of the 1920’s in the U.S. brought about great new views, attitudes, politics, celebrities, economies. During these years new products, industries, methods of manufacturing, demands, and jobs were being created. Now that this great decade has come to an end, in this issue we will look back at the high and lows of the economy. We will analyze the great stock market before it crashed in 1929. Venture into specific industries and jobs that performed like never before, those that prospered and those that inevitably failed. Take a trip to some of the “underground” black markets, and check out how well organized crime industries performed. Right from the start of the 20’s a new approach for the U.S. was taking place in its economy. “NEW and BIG”, was the name of the game; new discoveries and inventions, new products being patented, new business in every field, new ways of manufacturing and producing things, huge powerful companies emerged that forever would change our nation. With WWI just ending, Warren G. Harding becomes President of the United States in a decade that would forever change our nation. This influenced the President to plan his approach towards the growing economy, in which he wanted the government to take a limited role. Even though he had a plan, he pretty much had no idea what he was doing. He unintentionally allowed cabinet members to gain wealth through graft and other forms of corruption. One major scandal that occurred because of this was the Teapot Dome Scandal. It involved cabinet member Albert B. Fall, who sold oil reserves for his own gain. President Harding after only 3 years in office died, in 1923 leaving the office for Calvin Coolidge. Straight into office, he knew what he was doing and how he was going to do it. He favored business in the country by lowering taxes, government spending, and keeping profits up for small business. One could say he was a “probusiness conservative”. But despite his immense support for economic prosperity, some of his policies of laissez-faire contributed to the downfall of the economy into the Great Depression we are in now. Even though the government was doing its part in the economy, a lot more had to do with the actual business. As stated before new methods of production were made, one of these common methods was mass production. This method allowed a big company like Henry Ford’s automotive industry, to produce more efficiently. The actual definition method involves “producing more of the same product or parts in large quantities, thus making it cheaper and faster to make”. As this process improved and more products went out on the market, new forms of advertisement came with it. One major form that still could be considered the greatest was that of radios and movies. The Stock Market: As industries improved through it ways of production, manufacturing, and selling. One thing grew with it and that was the amount of buyers, due to the fact that people now had jobs, and not only jobs, but high paying ones. This in turn led many people to improve their standard of living. In doing so they bought things like never before! Now many businesses realized this and implemented a plan to help the everyday buyer, this plan was known as the installment plan. With it consumers could buy merchandise with “credit”, thus encouraging them to buy cars, refrigerators, radios, washing machines, and other things of that nature. Another system that was used, but in the stock market was that of buying on margin, which allowed people to buy large amounts of stocks to gain a quick profit since stocks were gradually increasing. At the time it appeared to everyone that the stock market was improving and that everything they were doing was for the better, but little did they know that they were digging their own stock market’s grave. Specific Jobs/Industries: During this decade many jobs and industries were created as prior mentioned. Many people were employed and higher wages were common. One reason for
this was the Quota System which limited immigration tremendously and gave jobs to those that lived in the United States. The major industries at the time that had a great impact even up to today were automotive, media (movie producers such as “Columbia Pictures”), banks, large publishers, and new technology manufacturers. One industry that struggled the most was the Agriculture industry. With industrialization in the U.S., new machinery allowed food to be produced faster, the problem with this was that a surplus of food was being made and going to wasted, thus hurting the industry hard with so many low prices. The Black Market: Even though our nation was in its greatest economic status at the time, an underground “criminal” market prospered as well. With prohibition laws through the 18 amendment well under way. Underground bars known as Speakeasies, which sold alcohol were appearing. With these bars along came a new “job” known as the bootleggers, where people smuggled liquor into the U.S. from Cuba, Canada, and the West Indies. They took advantage of many that were innocent and gullible, and made a fortune through an illegal business. One famous bootlegger business that prospered through organized crime was that of notorious, Al Capone. Who was worth 100 million if caught, and handed over to authorities. You know that if you’re worth that kind of money, you must be doing something wrong, right! His underground business proved that prohibition laws were just making it harder for authorities, and it showed the large amounts of money in the alcohol business that was lost to the black market. Recent years since the Great Crash of 29’: In 1928 our former President, Herbert Hoover was sworn into office with great anticipation for an even better future in the U.S. He once stated that the nation was close to overcoming poverty, but no one could foreshadow in immense prosperity that it would all come to an end. We all remember like it was yesterday the great stock market crash on October 29, 1929. Investors in stocks lost about 30 million in just 2 weeks, and lost more by the minute. Chaos filled the streets, and home of millions to what would become the beginning of the Great Depression we are suffering today. With this great decade that came to a sudden fall, the nation can reflect on the greatness we can achieve, but at the same time learn from the mistakes many of our fathers made. We see how united and prosperous we can be, but now we are experiencing the consequences of our ignorance. The 1920’s will forever be known as the “Roaring 20’s”, the 20’s that roared with new inventions, that roared with new industries, that roared with new jobs, that roared with new luxuries, but roared over all in a new life. Let us hope and pray that the struggles we are facing now will soon come to an end. That through our mistakes we learn the paths we should avoid, and the paths to take to ultimately reach another “roaring” decade.