great depression

             Most Americans today DO NOT remember the most severe economic crisis in American history, the Great Depression. No period in American history has done more to determine our social and economic policy or to change our relationship with our government. The effects were devastating, lives were ruined and fortunes were lost. Recovery was slow and uncertain with low wages and long hours for those who could find work. Many new laws and government programs were created to help those who were suffering. These policies have had a lasting effect to this day. The main factors that brought about the Depression were the unequal distribution of wealth, the government policy of favoring businesses and the wealthy, and extensive stock market speculation.
             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 productivity increased workers were being replaced by automatic or semi-automatic machinery by nearly 200,000 a year in the 1920's.(Korpios) With greatly reduced operating expenses industrial magnets such as Henry Ford made millions. In one year Ford reported making 14 million dollars yet in the same year the average personal income was $750.(Gusmorino) This fire was fanned by President Coolidge who lowered the federal tax rates of the wealthy. Even though corporation were enjoying record productivity on profits the wages of the workers were not reflecting it. In a study done by the Brookings Institute in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%(McElvaine38) In addition the gap between the rich and the middle class was growing fast.