The Market Crash and Banking Crisis

This section details how the stock market crash in 1929 occurred and its devastating impact on the American economy. Multiple factors contributed to the collapse:

Definition: Bull Market - A market characterized by optimism and rising share prices, which dominated the 1920s until the crash.

Key causes included:

• Overproduction of goods
• Land speculation, particularly in Florida
• Excessive stock market speculation
• Weak banking regulations

Vocabulary: Federal Reserve Board - The central banking system of the United States, which kept interest rates low at 3.5% in 1927.

Example: Between 1921-1928, approximately 5,000 banks went out of business due to poor regulation and risky investments.

The section concludes with the introduction of the Glass Steagall Act in 1933, which helped modernize the American banking system and stabilize the economy.

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Wartime Cultural Changes

The war period saw significant cultural shifts through various propaganda and entertainment mediums.

Definition: Domestic Propaganda - Government-sponsored messaging to increase patriotic sentiment and support for the war effort.

Example: Disney characters like Mickey Mouse and Donald Duck were used to champion the war effort.

The Economic Boom (1920-1929)

The early 1920s marked an extraordinary period of Economic boom and crash during 1920s, characterized by remarkable growth in America's Gross National Product. The economy flourished due to several key factors including post-WWI advantages and technological innovations.

Highlight: America's GNP rose dramatically from $73 billion to $104 billion, with unemployment remaining low and inflation under 1%.

Example: The automobile industry, particularly Ford's assembly line production, employed 375,000 workers (7% of manufacturing workforce) and produced 1.25 million cars in 1920 alone.

Definition: Laissez-faire - A policy of minimal government intervention in economic affairs, which characterized the Republican approach during this period.

Key factors driving the boom included:

• World War I's economic impact
• Mass immigration providing labor
• Abundant natural resources
• Mass production techniques
• New technology adoption
• Hire purchase availability

Vocabulary: Fordney McCumber Tariff - A 1922 policy that raised taxes on foreign goods to protect domestic industries.