A general deterioration of economic conditions in the United States was evident by the spring of 1920. Programs and procedures put in place during World War I had in many instances been removed or modified after the armistice, which resulted in a certain amount of economic dislocation.
In particular, U.S. manufacturers had built up large inventories of goods, but the consuming public was unable to absorb them. At the same time, American exports to overseas nations dropped sharply at war’s end, which deepened the plight of industry.
The results of the recession were high unemployment, a broad series of business bankruptcies and generally falling wages for those Americans who kept their jobs.
Most severe of all, however, was the protracted fall of farm prices — an event that would continue to a greater or lesser extent throughout the decade; when the 1920s later began to roar, few farmers joined in the prosperity. Their effort to gain relief was a frequent appeal during the era, but one that often fell on deaf ears in Washington.
Overall economic prospects improved for many during 1922, which is often cited as the beginning of the great boom. However, the return of prosperity would not go on uninterrupted, because several reverses hit sectors of the economy from time to time in the years before the great market crash of 1929.
See Domestic Events during the Harding era.
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The Perils of Prosperity, 1914-1932 by William E. Leuchtenburg.
Beginning with Woodrow Wilson and U.S. entry into World War I and closing with the Great Depression, The Perils of Prosperity traces the transformatio...