Elements of Fiction

The 1920’s

Submitted by

Yumna Hoque

Course Code :

Ms.

The 1920’s were an amazing era filled with new social, artistic, economic and cultural changes but it also led to a depressing period of time. Most of the changes and decisions made in the 1920’s were mistakes that led to the great depression. Some of the mistakes made were too much credit buying and not being educated of how to buy and sell stocks, over production and over-expansion of resources, supplies, factories and dependence on farms, and also starting of a new innovative era that people were not used to and didn’t know how to handle the new technology and objects such as radios, cars, electrical objects etc.

Many people bought most of their things with credit, and were uneducated of knowing how stocks worked, which led to them losing more money than gaining money; this was one of the greatest causes of the biggest economic crisis, known as the “The Great Clash”. On October 29, 1929, all the prices of shares started to drop; this event was called “Black Tuesday”. People in the 1920’s started to invest their money in stocks. A stock is a share in the ownership of a company, which allows you to get a share in the earnings of the company.  People bought shares from companies, but they were very uneducated about the stock market. They were not aware of that if somebody buys lot of shares, they should sell some too. They were also unaware of the fact that the shares could decrease. They just purchased a bunch of stocks at once and hoped that it would increase in the future and they could pay back the loan and profit.  During the 1920’s the rage were consumer goods and products such as radios, electrical objects and auto mobiles, everyone wanted to be part of the rage and everyone wanted to purchase all these new inventions. This increased business profits and production. Many products were bought using instalment contracts; these products are purchased on credit, using loans. Many people could not pay back the loans and went in debt, followed by the consumer goods purchased by credit was repossessed, which causes the economy to drop. This made a lot of people poor; many were homeless, jobless and hungry. This was the beginning of the great depression.

Over-production and over-expansion, and dependence on farms were an important factor to the depression. Canada was depended on the farms a lot and this caused a crisis when an awful drought hit. Lack of rain caused all the crops to slowly dry out and this was a tragedy because Canada couldn’t get food sources. This made many people hungry, because they didn’t have enough food supplies to feed everyone. There were also very high tariffs; they needed lot of manufactured products, which cost a lot of money. Canada begun to be unable to pay for most of the products being made and many people couldn’t access the supplies they needed to live, like toasters, furniture, clothing etc. Over-production of objects occurred, which made Canada go into debt, because they couldn’t pay for half of the products being manufactured for the country. Most of the money that Canada needed was spent for building more factories to produce more consumer products, there were many warehouses that contained all the unsold goods, and this is over-expansion. Canada had lots of factories that manufactured goods, which was not sold due to the lack of money. This made the workers in the factory to go to bankrupt, because no one was buying the goods that they were producing. This is another cause to the great depression, because over-production, over expansion and the dependence on the farm resources, caused a big drop in the economy, which made everyone become poor.