Economic Problems

  consumer billboards
Billboards helped to promote consumerism
[audio]Unequal distribution of wealth

  • Business men, middle-class workers, and some factory workers made enough money in the 1920s.
  • Workers with low skills that worked in factories such as the textile mills, coal mines, and steel mills did not make enough money in the 1920s.
  • Many Farmers struggled in the 1920s because they could not make enough money to pay off their debts.
  • The federal government did not do much to help the farmers.
  • President Coolidge vetoed bills that would have helped farmers because it would make consumers pay more for farm products.


  • Demand for American products decreased in the late 1920s for three reasons:
    1) The wealthy had already bought all that they wanted.
    2) The poor did not have the money to spend.
    3) High tariffs limited trade with Europe.
  • Inventory is the amount of products that have been made, but that are not yet sold.
  • The decrease in demand forced companies to stop hiring and stop building new factories.

High Levels of Debt

  • Many consumers were in debt because they still owed money on all of the products they had already bought through installments.
  • Business was also in debt because they borrowed money to expand and make more products.

A Shaky Stock Market

  • Speculators took large risks playing the stock market.
  • Speculators: bought several stocks, only paid a small portion, and sold the stocks at a higher rate.