Although the early 1920s seemed to be a promising and prosperous time, Americans didn"t know that they were on the verge of a great disaster. Bigger than the problem of over spending, the nation"s income was being distributed very unevenly.

             The large portion of the nations" income went to the wealthy, and the portion grew larger as the decade proceeded. The uneven distribution was due largely to two factors: While businesses showed large gains in productivity during the 1920s, workers received a relatively small share of the wealth this produced. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers" wages only grew by 8 percent. Corporate profits shot up by 65 percent in the same period, and the government let the wealthy keep more of the profits. To make matters worse, the Revenue Act of 1926 cut the taxes of those making one- million dollars or more by more than two- thirds. As a result, in 1929, the top 0.1 percent of families had a total income equal to that of the bottom 42 percent. This meant that the people who wanted to indulge in the new fads and products of the age, didn"t have enough money to do so. .

             American Farmers were already in an economic depression during the 1920s, which made it hard for them to take part in the consumer- buying spree. Farmers had expanded their output during World War I, when demand for farm goods was high and production in Europe was cut. But after the war, farmers were competing in an over-supplied international market. Prices fell and farmers were often unable to sell their products for a profit. To get around this difficulty, the 1920s produced another innovation, "credit." .

             This was simply an attractive name for consumer debt. People were allowed to buy now and pay later. But this "wonderful" innovation just put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off the assembly lines.