he strength of America's economy in the 1920's came to a sudden end in October 1929 - even if the signs of problems had existed before the Wall Street Crash. Suddenly the 'glamour' of the Jazz Age and gangsters disappeared and America was faced with a major crisis that was to impact countries as far away as Weimar Germany - a nation that had built up her economy on American loans.
The huge wealth that appeared to exist in America in the 1920’s was an illusion.
For example the African Americans and the farmers had not benefited in the Jazz Age but neither had 60% of the whole population as it is estimated that a family needed a basic minimum of $2,000 a year to live (about £440) and 60% of US families earned less than this. Almost certainly some of the 60% included those who had gambled some money on Wall Street and could least afford to lose it in the crash of October ‘29.
The very rich lost money on Wall Street but they could just about afford it. But the vast bulk could not afford any loss of money. This had a very important economic impact as these people could no longer afford to spend money and therefore did not buy consumer products. Therefore as there was no buying, shops went bust and factories had no reason to employ people who were making products that were not being sold. Therefore unemployment became a major issue. The depression took a while to get going but by the winter of 1932 it was at its worse.
The impact of the Wall Street Crash :
1) 12 million people out of work
2) 12,000 people being made unemployed every day
3) 20,000 companies had gone bankrupt
4) 1616 banks had gone bankrupt
5) 1 farmer in 20 evicted
6) 23,000 people committed suicide in one year - the highest ever
There was no system of benefit for the unemployed. Charities such as the Salvation Army gave out free food and shelter. It is known that some people actually starved to death. In some states men deliberately set fire to forests to get temporary...