Essay exam

Essay exam

During the 1920s, USA was in a boom. The growth of the country was fast, because of new methods and technologies that industries were developing. The population was divided in people who was able to buy items as radio or cars and the poor’s that couldn´t, because of these the banks gave credits to the people to pay in different pays, Also the hire purchase helped people to buy more things and also they could reserve money in the case they were unemployed. However the overproduction left industries in bankrupt because of the mass production and other factors.

To start, the republican policies were able to maintain taxes low, so people could spend more money, this method was the Laissez-Faire, In addition people with low payment couldn´t bought a car or others items, so they used to asked banks to give them credits. Finally people could buy products and in order to this the economy was growing. Industries also get involved with credits, for new machinery and methods to enhance the production to afford more money. The hire purchase was used in some cases in the motor industry. Lots of Americans take this new “option” of buying and then paying, and this was very used when car productions were revolutionized by Henry Ford. A new scheme similar to these one appeared, and it was people who transform in “Speculators”. This people “Speculators” have to pay the 10% of the cash needed to start buying shares and when the price rises they started selling them making more money and because of this a lot of people that was in a bad economic way, change gaining lots of money and from entering the stock market that was an easy and quick way to get rich and afford money, because of the loans of banks.

Unfortunately, The overproduction was passing an economic problem, why?, because as people were helped by credits increasing production, people did not wanted to continue buying more because they had what they want due to the stock market and propagandas, so industries cannot sold the same amount of money they were used to, as also this problem caused unemployment and dissatisfaction of population. Moreover industries went bankrupt and also banks, because as people had what they want they don’t have money to give loans, Also Europe was the most affected in economy ways, because the first world war was in process and Europe countries were destroyed and poorly bad that they couldn´t buy things to America, and also Japan exploits in the far East. Despite the appearance of the industries like electric industries and petrol too many others industries were replaced by this one´s losing importance and causing unemployment. Petrol to developed plastic was not on the interest for credits and hire purchase, even though petrol was used in the majority of the industries, the overproduction was led to unemployed and poverty starting again the affections of the boom.

In conclusion, however industries were bankrupt and people were not going to spend more money, the hire purchase, the credits and the loans gave by banks helped the government of USA to major their economy in the 1|920s as a good action to help people affected by the boom.