How impornt were credit and hire purchase as a reason for the economic growth in the Usa in the 1920´s?
In the 1920´s, there was an economy growth in the USA, this was called the economic boom. This had happened for several reasons in which we can mention the credits, when people asked for money and paid it back later, and hire purchase, when markets gave people the chance to pay the product they bought every month in quotas until they paid it at all. This two reasons allowed the boom to happened, althogh this was only for part of the population.
On the one hand, we can mention that the mind state of american people, both rich and poor, due to the economic boom in the 1920´s, was to have a nice house, a good job, plenty to eat, and to had the latests consumer goods. Their thought was that if they spent more money they would have a better life style. For this reasons, there was created a new method, "buy now pay later", this allowed people to buy everything they wanted, and paid for it when they got the money. This caused an increased on the production since people spent and buy more, such as the motor one, in which it was set up a moving producing line. In addition, cars made it possible for people to buy a house in the suburbs, stimulated the growth of small businesses it gave work to hundred of thousands of people and jobs were easier to find. Not only people was benefit by this, but also banks, since they lended money to people who was buying a lot, and then people shoud paid back that money with an interest and banks ended up earning more money. There was also some people called speculators, they invested on shares and when their prices rise they selled them in a higher price, they also believe that prices will keep rising, also banks get involved on this. The economy was doing so well that there was a mood of confidence on it.
On the other hand, we can say that not the entire population was benefit by this, starting by saying that the republicans who were the ones in power believed that they should not interfere in the economy of people´s life, they also lowed the taxes, they believed that if taxes were low, people would spent more money on American goods, another method they introduce were tarifs, protecting the American bussines against foreigh competition. The farming industry was part of the population who was not benefit by the boom for several reasons such us, Europe importing less food from the Usa, the competition with highly efficient companies and the overproduction on products such as wheat who nobody wanted. Prices fall so farmers tried to sell their produce, this became so serious that some of them couldn´t affort the situation and need to move into cities whithout any knowledge. Workers in industries also suffered from competition, and the 42% of Americans principal black people and inmigrants were less paid than the minnimun they should be paid, so they did not have the money for essential goods. Unemployement remain a problem because of the growth in the industries did not created new jobs and also because textile, manifacture and coal were replaced by oil. And there were also plenty unskilled peolple working on them.There was plenty of people buying products so they didn´t care about the elaboration of it, if not to make it cheaper and faster, so products were of low quality. There were set up new entretainments such as music and the radio, this was not a benefit since, in industries, the working hours dropped so peolple could have more entertainment. The last thing we can mention is that all the confidence in the country ended up causing the wall street crush and destroying its entire economy.
To conclude, in my opinion hire purchase and credits helped only the rich people, mostly white americans, giving them confidence and making them richer. While the black people and inmigrats suffered from pooverty and discrimination. I think that in the end all the confidence they had end up destroying and causing a collapse in the american economy.
On the one hand, we can mention that the mind state of american people, both rich and poor, due to the economic boom in the 1920´s, was to have a nice house, a good job, plenty to eat, and to had the latests consumer goods. Their thought was that if they spent more money they would have a better life style. For this reasons, there was created a new method, "buy now pay later", this allowed people to buy everything they wanted, and paid for it when they got the money. This caused an increased on the production since people spent and buy more, such as the motor one, in which it was set up a moving producing line. In addition, cars made it possible for people to buy a house in the suburbs, stimulated the growth of small businesses it gave work to hundred of thousands of people and jobs were easier to find. Not only people was benefit by this, but also banks, since they lended money to people who was buying a lot, and then people shoud paid back that money with an interest and banks ended up earning more money. There was also some people called speculators, they invested on shares and when their prices rise they selled them in a higher price, they also believe that prices will keep rising, also banks get involved on this. The economy was doing so well that there was a mood of confidence on it.
On the other hand, we can say that not the entire population was benefit by this, starting by saying that the republicans who were the ones in power believed that they should not interfere in the economy of people´s life, they also lowed the taxes, they believed that if taxes were low, people would spent more money on American goods, another method they introduce were tarifs, protecting the American bussines against foreigh competition. The farming industry was part of the population who was not benefit by the boom for several reasons such us, Europe importing less food from the Usa, the competition with highly efficient companies and the overproduction on products such as wheat who nobody wanted. Prices fall so farmers tried to sell their produce, this became so serious that some of them couldn´t affort the situation and need to move into cities whithout any knowledge. Workers in industries also suffered from competition, and the 42% of Americans principal black people and inmigrants were less paid than the minnimun they should be paid, so they did not have the money for essential goods. Unemployement remain a problem because of the growth in the industries did not created new jobs and also because textile, manifacture and coal were replaced by oil. And there were also plenty unskilled peolple working on them.There was plenty of people buying products so they didn´t care about the elaboration of it, if not to make it cheaper and faster, so products were of low quality. There were set up new entretainments such as music and the radio, this was not a benefit since, in industries, the working hours dropped so peolple could have more entertainment. The last thing we can mention is that all the confidence in the country ended up causing the wall street crush and destroying its entire economy.
To conclude, in my opinion hire purchase and credits helped only the rich people, mostly white americans, giving them confidence and making them richer. While the black people and inmigrats suffered from pooverty and discrimination. I think that in the end all the confidence they had end up destroying and causing a collapse in the american economy.
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