Buying on Credit in the 1920s

In: Other Topics

Submitted By ambersterling
Words 1615
Pages 7
Newspaper Article
Merlynna Harley
HIS/120
January 23, 2012
Jordan Billings

Buying on Credit in the 1920s Leads to the Great Depression in the 1930s
The citizens of the United States started buying on credit in the 1920s all over the United States because there was a great economic boom. When the United States citizens started buying on credit they did not know that it was going to take a turn for the worst.
In the 1920s the economy was booming with new industries and new methods of production. America was able to use a large supply of raw materials to produce chemicals, steel, glass, and machinery in which it became the structure of a massive boom in products. Stores started to sell lots of goods which made the value of stocks rise. Therefore many United States citizens started to invest in the stock market with borrowed money assuming that they would make a fast profit. Thinking they could pay the loans off when they sold the stock. There was more people invested into the stock market in the 1920s then there ever was before. They started buying cars, refrigerators, and other luxury items with money they did not have. The economy eventually quit booming and people could no longer buy things because they had spent all their money into paying off their credit. This left millions of people in debt and many people ended up losing their jobs. The stock market crashed and the economy started to collapse inflammation started and the United States entered the Great Depression.
Supply and demand helped lengthen the Great Depression. American farms and factories produced enormous amounts of products during the prosperity before the Depression. People’s average wages had stayed the same even as prices of goods went up. The citizen who lived in urban areas had more than the people who lived on farms. The people stopped buying goods and products because they had no…...

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