The U.S. before the Great Depression - The Great Depression
What was the U.S. like before the Great Depression?
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(June, 1922 Radio Broadcasting magazine). The time period that preceded the Great Depression was the 1920's, commonly referred to as the Roaring Twenties. It was a time of progress and it greatly changed the average American lifestyle.
ECONOMIC The biggest factor in the changes experienced during the 1920's would be the economy. America experienced nationwide economic prosperity due to cheap mass production of goods and the new marketing method of advertising. Consumer goods became more popular such as radios and household appliances in contrast to the popularity of capital goods like railroads in the 19th century.
The introduction of the installment plan made affording all of these new goods easier. It helped people to be able to purchase items over an extended amount of time without having to pay too much money at the moment of purchase.
SOCIAL
The economy created a large income gap between the rich and the poor. There were numerous investment opportunities found in the newly formed mass production industries and as a result, the stock market started to become more successful. However only less than one percent of American citizens owned any stock so its financial benefits only went to the rich. This only made the rich become richer and the poor become poorer.
Another group that benefited was the middle class. Their lives became much easier due to increase in pay: wages increased approximately 20% during the 1920's. Despite these two groups' positive advancements, the lowest class suffered extremely. Almost half of America's population still lived in rural farmlands because of their dependency on agriculture for income. The end of World War One meant the end of the high demand of farm products, leaving farmers with no market.
"America's present need is not heroics but healing; not nostrums but normalcy; not revolution but restoration."
-Warren G. Harding
POLITICAL
Republican Party candidate Warren G. Harding ran for president in 1920 and coined the term "normalcy" in reference to what he thought the U.S. needed after the chaotic years of World War One. He reduced government spending and reduced taxes on wealthy citizens. He lowered taxes in an attempt to stimulate the economy by making the wealthy spend more and the benefits of it would "trickle down" to the lower class. However, his trickle-down economy only led to the working class becoming poorer.