1920s: The Great Depression

The 1920’s could be described as economic boom gone bust. The early 1900’s began with an advancing industrial revolution and ended with the Stock Market Crash of 1929. The trigger that caused the great depression began with the boom in sales of stocks in a bull market. It continued for six months into the start of the Hoover Administration in January 1929. Two market crashes within a short period of time in October 1929 leading some economists to refer to Thursday, October 24 and Tuesday, October 29, 1929 as the “Dead Cat Bounce” that initiated the great depression of the 1930’s. By 1932, stocks dropped to 90% of their values. A decade of overpriced stocks took two years to create the great depression that followed.

The Great Depression – The End Of An Economic Boom

Great Depression

Great Depression

For two decades, the US enjoyed an unparalleled economic boom as a result of widespread business growth and a general freewheeling attitude. World War I was over. Women were given the right to vote in 1912, Lindbergh was making strides in aviation and the 1920’s “roared” with jazz, bootlegged liquor and women shockingly smoking in public. Stocks continued to spiral upward in price. Suddenly, a “Dead Cat Bounce” occurred on two days in October 1929. Stock prices hit rock bottom and wild selling left banks with little in reserves to stabilize. A depression in an economic phase is referred to as a “depression”. Due to the severity of the economic depression in the 1930’s, this period was referred to as the great depression.

Hard Times For The Whole Country

The great depression lasted almost ten years. Millions of jobs were lost, all debt was called in for payment by banks scrambling to create financial reserves, until banks closed one after during the great depression. This brought on the emergence of “Hoovervilles”, shacks fashioned by the homeless, heated by old newspapers and charities providing food with bread lines and soup kitchens. The era of the great depression was echoed in the song, “Buddy, can you spare a dime?”

Advertisement