Chapter 22 Section 1

1. Industry: Basic industries which had been important such as railroads, textiles and steel had barely made a profit with the advancements in technology and the superficial prosperity of the time. Railroads lost business to trucks, busses and private automobiles (all new kinds of transportation). The businesses which had grown exponentially during World War I such as mining and lumbering weren't in high demand anymore. Coal had competition from new power sources such as hydroelectric power, fuel oil and natural gas. Popular industries of the '20s were in decline as well, such as automobiles, construction and consumer goods. Housing starts were in decline, which was als a big problem, because many jobs in related industries bagan to fall as well.
2. Agriculture: During World War I, prices rose and international demand for crops like wheat and corn increased from war-ravaged countries. Farmers planted more than ever and took out more loans because they needed money for seeds and farming equipment. Demand fell after the war greatly, and crop prices declined by 40% and more. Farmers, however, continued to grow more crops than ever because in the past few years they had gotten more money that ever from doing that, which depressed prices further when the extra crops weren't needed. The annual farm income fell from $10 billion to $4 billion, and farmers who had taken loans had a hard time repaying their debts. many farms were foreclosed and property was taken in payment for the debts. Many rural banks began to fail as farmers couldn't pay their loans. The McNary-Haugen Bill was introduced by congress, which called for federal price supports for key crops such as wheat, toobacco, corn, and cotton, and the government would buy surplus crops at a guaranteed price. but President Coolidge vetoed the bill twice.
3. Consumer spending: As the incomes as farmers fell, they couldn't buy as many goods and services, and by the end of the 1920s, many Americans weren't buying nearly as much due to rising prices, stagnant wages, and overbuying on credit in the preceding years.
4. Stock market: Many people who could afford to invested in the stock market. Stock prices rose steadily throughout the '20s, and the Dow Jones Industrial Average had reached ahigh of 381 points, which was 300 points higher than it was 5 years earlier. Many Americans rushed to invest in stocks and bonds in the "bull market", or time of rising stock prices, and by 1929 about 4 million Americans owned stocks. However, people were engaging speculation, which was when people bought stocks and bonds on the chance of a quick profit while ignoring the risks, and many began buying on margin, which was paying a small percentage of a stock's price as a down payment and borrowing the rest. the amrker went upward with the uninhibited purchasing by buyers, and the government did little to discourage this or regulate the market, but if the prices of stocks declined, then then people had no way to pay off their loan if they bought on margin.