Great Crash (532 words)

Historical Context Essay

Context

The US economy experienced a short postwar boom as wartime scarcity was overcome (1918-20) but rising prices led to speculation in commodities and land, encouraged by low interest rates. The Federal Reserve raised rates to an unprecented 6% early in 1920, precipitating a short but severe depression. In 1921, 505 banks suspended business, mainly small state banks. Whilst in retrospect this seems an avatar of things to come in 1929, the economy recovered in 1921 and boomed until 1929. Wages and prices remained stable whilst industrial production across the 1920s increased 43% and income for many large firms tripled 1922-29. Dividends doubled, fuelling increased consumption and investment, especially in the bonds of holding companies and …

Citation: Clark, Robert. "Great Crash". The Literary Encyclopedia. First published 13 April 2005 [https://www.litencyc.com/php/stopics.php?rec=true&UID=484, accessed 07 July 2022.]

484 Great Crash 2 Historical context notes are intended to give basic and preliminary information on a topic. In some cases they will be expanded into longer entries as the Literary Encyclopedia evolves.

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