The Destruction Of The Economy In The 1920's

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he United States benefited from the situation after ww1. American industry had escaped destruction, the nation had a head start on converting its economy from one focused on war to one focused on consumer production. Throughout the 1920s American businesses prospered because of a frenzy of spending on the new consumers goods. Recovering from the war economically proved to be a more difficult task han winning the war militarily. The Allied nations were heavily in debt and their resources had been depleted because of the high cost of paying for the war. In addition, Europe 's major cities and industries had been destroyed and required rebuilding. And for the duration of the war European industries had focused on producing armaments and military supplies. Now these factories had to be reconverted for civilian industry. In Europe this was more difficult because of international trade competition. The US backed away form economic leadership. Economist Charles P. Kindle Berger asserted that a major cause of the depression was America 's refusal to assume leadership in the financial…show more content…
The crash aloe did not cause the depression. Farmers were already in trouble and had never fully recovered from the recession of the early 1920s. European and American farmers contiued to produce more food than consumers could use, so prices fell. With decreased profits, American farmers could not repay their mortgages. And European farmers could not purchase the products that American and Asian industries were trying to export. The new technology that had made each worker more productive not only decreased the number of people employed, but also increased the amount of goods produced. Because of farm troubles and unemployment, there were not enough consumers able to purchase all of those products. That resulted in more factoris closing and more people becoming
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