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In the early-mid 1920s, production by farmers was far more than the population consumed. Mechanization in production techniques meant there was an increase in output that was expensive thereby putting firms in debts. Falling food production and reduction in land prices resulted in agricultural losses leaving vast populations poor and unemployed. With the demand dropping and supply increasing, the price of products reduced leaving the over-expanded firms short-changed leading to closure (Saint-Etienne, 2013).
Top workers had their income rising by 75% while the bottom workers only enjoyed a 9% rise in wages. With industrial production growing by 50% in 1920s, there was wide a gap between high-income earners and those struggling in poverty leading to a reduction in disposable income to purchase the produce. With extensive unemployment, the poor required aid from the already cash-strapped authorities further deepening the financial problems.
Explosion of stock markets built on speculation as seen in modern capitalist economy caused investors to buy stock believing it was going to rise quickly so that they could sell their stocks later. Most stock purchases were on credit as investors were required to have 5% of the stock’s value with the rest being supplied by a loan ‘buying on margin’. Speculation together with the short-term outlook of the investors did not offer consistency and stability for the system to yield economic benefits. The resulting tension led to selling of the stock causing a mini crash resulting in mass panic as the middle and upper classes lost money.
The presence of numerous small banks with insufficient resources to handle the high demand for their money in conjunction with increasing nervousness about the state of the stock market played a major part in initiating the Great Depression. For this reason, they had to sell assets, borrow off other banks or shut down. Drying up of credit and reduction in lending
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The methodology one adopts to tackle the situation depends on the intellect as well as prior experiences under certain circumstances the situation becomes tough and the individual cannot control the things. The things seem to recede away and here germinates the feeling of despair, anguish, hopelessness and distress together leading to depression.
The progressive era from 1890 to 1920 can be argued as the golden period when the economical growth and social development were at their highest level. Much considerable advancement in the areas of politics, society, and culture can be identified under this timeframe.
However, during this period there were also major events that created a turning point in the American History. A comprehensive discussion concerning two major events is provided below: Discussion 1 One major turning point in the American History during the progressive Era was the rapid rise of the various social movements such as: The Women and the Peace Movement, Workers Movements, The Woman Suffrage Movement, The Women Trade League as well as the African Women Reform Movement.
As such, a study of history is necessitated by the desire to have a thorough understanding of the instigating forces propelling the development of America as a whole. There are two main historical events that shaped the American contemporary society, economy, politics and culture.
Although it had its origin in the United States of America, it spread to the other parts of the globe. It began in the month of September 1929 in the US, after a devastating fall in the stock market prices. In the first six months of 1930, government and businesses spent more than they had in the previous six months.
The stock market crash made people increase their liquidity preference which in turn made them to hoard money.
There was increased agricultural and manufacturing output, but the wages were not in pace for all
However, people did not realize that anything economically devastating was about to happen. People had been spending a lot more in recent years and cash and credit began to dwindle. Soon employers had to begin laying off workers and a clear recession had
However, many people are living with depression and studies have found that a large number of these individuals do not seek medical care or are unaware that they need psychiatric help. This paper will assess the