The 1920s Economic Prosperity and Challenges

The 1920s Prosperity

• The 1920s were a period of economic prosperity in the United States.
• Warren G. Harding and Calvin Coolidge were presidents during the 1920s, both Republicans.
• Americans' optimism led to the election of another Republican president, Herbert Hoover, in 1928.
• However, an economic crisis was just seven months away.

Problems Facing American Farmers

• American farmers experienced hard times throughout the 1920s.
• They took out large loans for farm equipment.
• Post-war, they could no longer sell their high crop yields, leading to bankruptcy.
• This caused a rural depression, impacting millions of farmers in the 1920s.

Easy Credit and Consumer Debt

• Installment buying made the American economy vulnerable.
• Credit allowed Americans to purchase consumer goods, but often using borrowed money.
• This led to significant debt among American citizens.
• Eventually, the American economy crashed in 1929.
• The stock market crash began the Great Depression.

The Great Depression Begins

• The stock market crash marked the start of the Great Depression.
• One of the first institutions to collapse was the nation's banks.
• When stock prices decreased, investors quickly withdrew their money from banks.
• People lost their jobs and businesses cut back on spending.
• Unemployment rates rose dramatically.
• By 1933, nearly 30% of American workers were unemployed.
• The crash was noted by a particular day called Black Tuesday.