It was an age in which one fad rapidly displaced another.

1. Dance Marathons “Everyday in every way, I am getting better and better”.  Power of Suggestion It was an age in which one fad rapidly displaced another. Crossword Puzzles Mah-Jongg Flagpole Sitting

2. Gotta Have What’s New!!!

3. But now young ladies - if that was the appropriate word – were beginning to smoke, drink alcoholic beverages, ride in automobiles with men, use strong language, and engage in such unspeakable practices as kissing!

4. “The low-cut gowns, the rolled hose and short skirts are born of the Devil and his angels, and are carrying the present and future generations to chaos and destruction.”

5. The trouble began in the World War and the drastic changes it made in the relative economic positions of the world’s leading nations.

6. The World War converted the United States from a net debtor to a creditor nation. This change obligated the country to take more responsibility for the smooth operation of the international economy.

7. The nation wanted all of the advantages and profits of participation in world affairs, while minimizing the responsibilities that went with world leadership. The U.S. tried nothing less than to be the world’s banker, food producer, and manufacturer, but to buy as little as possible from the world in return.

8. The fundamental problem facing the American farmer in the twenties was chronic overproduction of agricultural commodities around the world.

9. Farmers sold on a largely unregulated world market and had no control over the prices they received.

10. During the World War the American government, particularly Food Administrator Herbert Hoover, encouraged a vast increase in agricultural production. This was fine during the war when European production was way down and demand was very high.

11. Farmers struggled with a depression throughout the prosperity decade.

12. More than one-quarter of American farm income in 1929 came from exports. The economy as a whole could be harmed by a sharp reduction in exports, but farming could be devastated by such an export drop.

13. In 1928, American international lending declined, the ability of consuming countries to pay for imports of American foodstuffs dropped sharply.

14. By the end of the twenties, roughly two-thirds of the industrial wealth of the United States had passed “from individual ownership to ownership by the large , publicly financed corporations.”

15. In 1929, some 2000 men, the active directors of the giant corporations, were in a position to dominate the life of the United States.

16. The competitive model of Adam Smith was based upon the assumption of numerous small units whose prices were determined by market forces. This was not the case in the United States of the late 1920s.

17. No cause of the Great Depression was of larger importance than the maldistribution of wealth.

18. A large part of the reason for the growing gap between rich and poor was that productivity was increasing at a far faster rate than wages. The bulk of the benefits from increased productivity went into profits.

19. The rich were getting richer at a much more rapid rate than the poor were becoming less poor. Government policies during the twenties were designed to achieve just this end. The unfavorable climate for labor unions made it more difficult for workers to obtain their share of the benefits of rising productivity. And Mellon’s tax cuts for the wealthy helped to aggravate the gross disparity in income levels.

20. Almost all the income of 3/4th (the lower ¾th of course) of the American people went for the consumption of nondurable and durable goods, that is, food, clothing, automobiles and houses.

21. The basic economic problem growing out of maldistribution was that those with the means to buy more of the products of mass production industry could satiate their needs and desires by spending only a small fraction of their incomes, while those whose needs and desires were note satisfied had no money.

22. A temporary solution to solving the problem of too much supply and not enough demand was the installment plan. Thus it was possible to buy cars, appliances radios, furniture and other expensive items on “easy monthly payments.”

23. Credit sales helped put off the day of reckoning by unnaturally keeping up demand. When the ability to pay with credit was exhausted, the same problem would arise again. Plus, now those who owed on credit purchases had to use their wages to payoff the past purchases instead of new ones.

24. The New Era economy (1920s) was dependent on a high level of luxury spending and investment by those receiving a disproportionately large share of the national income. A sudden loss of confidence by these affluent Americans combined with a loss of foreign markets and a saturation of the credit-purchase market at home could be devastating.

25. Americans came to believe that “they were predestined to become rich without work.”

26. The automobile and growing wealth put Florida within reach as a winter haven for the well-to-do of the Northeast. Thus people speculated in Florida real estate. One bought the land not for its use value, but in the expectation that it could be sold shortly to someone else at a handsome profit.

27. The speculative real estate market had limits and the bubble was bound to burst. The trick was to ride the expansion as long as possible and get out before the collapse. But greed was what it was all about, and many investors were tempted to stay in too long.

28. The Stock Market boom was built on the foundation of new technology, especially the automobile. Numerous other industries surged forward in the twenties, holding on to the rear bumper of the automobile. Rubber, steel, oil, road construction, suburban housing, service stations, and many others were dependent upon automotive sales. When those sales tapered off, the boom slowed; when they dropped sharply, the boomturned bust.

29. The source of the Great Bull Market was the same as that of the Florida land boom that preceded it; the notion that it was easy to get rich quick.

30. Stocks, once bought principally on the basis of their earning power, came to be purchased only for resale after their price had risen.

31. The magic words of the fantasy land in lower Manhattan (Wall St.) in the late 1920s were “margin” and “leverage.” Buying stocks on margin was similar to buying an auto on credit. The purchaser paid a part of the price- say 10 percent – and used the stock as collateral for a loan of the remainder.

32. The speculative boom in the stock market was dependent upon confidence. Once a sizable number of important investors decided the boom had ended, it had ended. It had all been built on expectations of rising prices. As soon as those expectations were reversed, the market had failed.