The Great Depresstion

12 Pages 2918 Words

The Great Depression was the worst economic decline ever in U.S. history. It began in late 1929 and lasted about a decade. Throughout the 1920’s, many factors played a role in bringing about the depression; the main causes were the unequal distribution of wealth and extensive stock market speculation. Money was distributed unequally between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This disproportion of wealth created an unstable economy. Before the Great Depression, the "roaring twenties" was an era during which the United States prospered tremendously. The nation's total income rose from $74.3 billion in 1923 to $89 billion in 1929. However, the rewards of the "Coolidge Prosperity" of the 1920's were not shared evenly among all Americans. In 1929, the top 0.1 percentage of Americans had a combined income equal to the bottom 42%. That same top 0.1 percentage of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all. Automotive industry tycoon Henry Ford provides an example of the unequal distribution of wealth between the rich and the middle-class. Henry Ford reported a personal income of $14 million in the same year that the average personal income was $750. This poor distribution of income between the rich and the middle class grew throughout the 1920's. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1-percentage enjoyed an extraordinary 75% increase in per capita disposable income. These market crashes, combined with the poor distribution of wealth, caused the American economy to overturn. Increased manufacturing output throughout this period created this large and growing gap between the rich and the working class. From 1923-1929, the average output per worker increased 32% in manufacturing. During that same period of time average wages for manufacturing jobs i...