1. Factors underlying the Prosperity of the 1920s
Mass Consumption
Speculation Boom
Uneven Prosperity

2. Mass Consumption
Changes in production led to new patterns of consumption (mass markets for goods)
More advertising
Workers with High wages & More time= Greater purchasing power
New programs for installment purchases and buying on credit
Small down payment to take item home : pay the rest in monthly installments + interest
Consumers were able to buy more (and much more expensive) goods.
Cars, Refrigerators, washing Machine, Vacuum Cleaner, Furniture, radios, etc
Once one seller offered an installment plan, competitors were usually forced to do the same

3. Speculation Boom
Speculation is the purchase of any item (not for personal use), but in the hope of selling it later at a higher price
1920s saw a spread of Speculation – Stock and Real Estate
Development of new industries, improved production techniques, and the expansion of mass markets led shares of corporations listed on the stock market to climb to dizzying heights
Gains in stock fueled speculation even more
People read about the success of others and it enticed them to buy stocks for “easy profits”
More people bought stocks… stock prices kept going up….

4. Uneven Prosperity WEALTH WAS HIGHLY CONCENTRATED
1929 STUDY SAID THE TOP ONE THOUSANDTH (.1%) OF Americans combined income was equal to that of the bottom 42%
Same top group controlled about 1/3 of all savings
¾ of Americans had no savings at all
Many still in poverty
Due to tractors and the spread of electricity, farmers faced lower income due to overproduction
Railroads suffered from new competition with cars
Textile workers faced lower wages because of foreign competition
Minority groups faced constant discrimination