Business+and+Politics

Fueled by easy money the nineteen-twenties were boom times like never before. The post-war recession was forgotten as everyone went on a spending spree. Credit, and not savings, enabled consumers to boost corporate profits to new levels.New business and production methods allowed manufacturers to make large profits which they plowed back into new factories and wage rises. Department store and service station chains used massive buying power and operating efficiencies to lower prices while increasing service and choice, helping wages to go further.Shoppers were able to buy big ticket consumer items like cars, fridges, washing machines, pianos, vacuum cleaners, furniture, and radios on time payment. Previously, these expensive items were only affordable by the wealthy. The growth in number of millionaires is shown in Tax Reports by the Treasury Department, who reported that there were 21 individuals with an annual income of over one million dollars in 1921, 75 in 1924, and 207 in 1926. There were an estimated fifteen thousand U.S. millionaires in 1927, and at least one billionaire, nearly four thousand of these living in New York, including three thousand living on or near Park Avenue. The Share Market climbed to dizzy heights as speculators bought on margin, and following well publicized successes, the general public joined in looking for easy profits. Shares could be purchased for a down-payment of 10%, the remainder of the price being financed by a loan from the share broker. When stock prices eventually slumped many investors had to sell shares to meet "margin calls" forcing share prices to drop further, exacerbating the problem and leading to the Share Market crash of October and November 1929.