Throughout the 1920’s Americans prospered tremendously, but those results were not shares by all. The war time economy of World War 1,which had seen spending rise grow three times larger than tax collections had just ended. Because America had invested so heavily on manufacturing during the war the shift began quickly. Technical advances and new inventions added to the growth. The average work output in manufacturing increased 32% from 1923 to 1929.(Gusorino) Though as product

The gap between rich and poor was further widened by the policies of the federal government.. President Calvin Coolidge’s administration greatly favored business. His two leading Cabinet members were Herbert Hoover and Andrew Mellon. Hoover’s role as Secretary of Commerce was to provide assistance for business. Andrew Mellon, Secretary of the treasury was one of the richest men in America. His major goal was the reduction of the tax burden on the rich.(McElvaine57) Mellon purposed Revenue Act of 1926, which Calvin College signed into law. It reduced federal income and inheritance taxes dramatically on the richest one percent.(Gusmorino) Mellon was also generous in granting tax credits, abatements, and refunds to large corporations and individuals friendly to the Republican Party.(McElvaine57) In the Collidge administration money and credit were available to industries for investment thanks to pressure on the Federal Reserve Board to keep the discount rate low. In 1927 the Federal Reserve Board’s decision to lower rates one half point to 3.5% which it said was needed to stabilize the pound actually meant more money at home for stock speculation.(McElvaine44) The federal government favored new industries over agricultural. During World War 1 the government had subsidized farms and paid high prices for wheat and other grains. The federal government had encouraged farmers to buy land, and modernize their methods to produce more food. This was because war-ravaged Europe had to be fed too. When the war ended the U.S stopped its policies to help farmers. This caused prices to fall and farmers to go bankrupted. The value of farmland fell between 30% to 40% between 1920 and 1929.(Korpios) The government made attempts to help farmers with the Agricultural Credits Act in 1923 but it was not enough. To make matters worse in 1924 the United States had started lending to Germany and other European countries. The money was mostly used to purchase United States goods. Since they had

Some topics in this essay:
World War, Brookings Institute, , Adkins Children’s, Mcelcanine47 Stock, Germany European, Dow Jones, RCA Corporation, Calvin College, Reserve Board’s, stock market, gap rich, disposable income, federal government, gap rich poor, european countries, help farmers, margin buying, prices fall, rich poor, september 1929,