-
Period: to
Psychology of Consumption
Many consumers of this time, majority being the rich and middle class, had a mental state of needing to buy more and more material things, or materialism. Now more people wanted to have the latest gadget or car and mainly bought these things on credit. -
Period: to
Lack of Market Regulation
There was also a lack of regulation of the stock market, having no laws to protect investors. A lot of the time banks would lend for stock buying due to lack of monitoring -
Period: to
Farmers Struggling
Farmers were now struggling to make ends meet. Competition as a world market increased as well as overproduction and low prices because everything was so overproduced. Farmers could not meet costs or loans to afford their farms and many farms forclosed. With this, the dust bowl and drought of the 1930's did not help them -
Period: to
Relatively Easy Credit Policy
along the lines of increase in personal savings, now the middle class is given the option of using credit and loans when before the middle class would pay for what they could afford -
Period: to
Rising Stock Dividends
One of the main economic causes of the Depression were increasing Stock dividends. Much of the 1920's before the stock market crash they followed a Bull Market, or when investors expect prices to rise rather than decline. The stock market was also manipulated, and full of speculation where people bought -
Period: to
Overproduction/Profits Invested in New Production
Factories now began to overproduce due to the high demand of material things for both the upper and middle classes. Many owners also were optimistic and made a lot of surplus goods. Since credit now was mainly being used to pay for these goods and so much surplus was made, money began to stop circulating. -
Period: to
Increase in Personal Savings
Civilian wages began increasing, giving them money to spend, however, this increase in wage did not match to the decrease of profits, especially with the onset of credit and loans within the middle class; now much of the middle class were taking loans and getting credit unlike before when only the rich got them. -
Period: to
Durable Goods Outselling Non-Durable Goods
Many people in the middle class and upper class now bought things on credit, but now many of these goods were durable rather than non-durable, such as cars, refridgerators, and houses. While non-durable goods are easier to over produce and not a lot of money, durable goods take longer to produce, are more -
Stock Market Crash
And of course, the immediate cause of the stock market crash of 1929, where basically all the short term causes within the 1920s add up to the crash itself.
