The purpose of this essay in to explain the historical development in the time period 1920 to 1945. It will be shown that the period of the 1920’s was a period of Republican control. The 1920’s were known as a boom period because of an increase in industrial production. But, it all ended in 1929. This let to the Great Depression by 1932 as well as the election of Franklin Delano Roosevelt and his New Deal policies. But, it would be World War II that finally pulled the United States out of the Great Depression.
The 1920’s, also known as the Roaring 20’s, were times of great economic boom. The boom was caused by a rise in industry. Unemployment went down from 4.27 million in 1921 to 2 million in1927 (Zinn 382). Warren Harding assumed the presidency in March of 1921 and appointed Andrew Mellon Secretary of the Treasury. Mellon lowered the tax rates for the top income bracket from 50 percent to 25 percent, while the low-income group only went down from four percent to three percent (Zinn 384). Mellon came up with the trickle down theory where when businessmen reinvested their government-sponsored windfall they would create jobs that would better the American standard of living.
The mass production techniques perfected by Henry Ford where applied to many other industries. But, employers put priority on quantity rather than quality. Which pushed many workers to their physical and psychological limit. This coupled with low wages brought on many labor strikes.
For the first time Americans where borrowing money for consumption and not production. Purchasing radios, refrigerator, washing machines, and cars all on credit. Even many stockbrokers offered buying stock on installment plans. Which made the stock market accessible to almost everyone. And when the stock was sold at a higher profit the loan was paid off in the process.
In 1929 the price of many stocks were inflated and the stock value did not truly represent the corporations earning potential. Once prices...