Wednesday, April 24, 2013

Prosperity and Innovation

  • Production methods (like those in the auto industry) allowed prices for the average consumer to decrease while more goods were made available.
  • Car ownership soared from 8 million to 23 million by the end of the 1920s.
  • The synthetics industry took off which included the first plastic (bakelite), cellophane, and nylon.
  • The entertainment industry made room for Hollywood and cinemas.
  • Skyscrapers, highways, and urban development were all results of the huge boom in consumerism from the American public.

The Stock Exchange

Wall Street was over-heating at a rapid rate. The over-confidence from consumers was so great that they even invested in fake companies. Many were buying shares ‘at the margin’ (a person could get a loan of up to 90% to buy shares) expecting to make enough profit to repay the loan when the shares were resold - brokers’ loans almost trebled 1926-9.  Disaster was on the horizon. In 1929, the economy fell into a depression once again and the booming economy of the "Roaring Twenties" was no more.
 This is a crowd outside the New York Stock Exchange following the 1929 crash.

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