Four major problems

Industry

It was not all boom for American industries. Traditional industries such as coal and textiles did not prosper. In 1929, when the average monthly income of New York bricklayers might be $320, coalminers were earning only $103 a month. Also, during the 1920s, in response to American import tariffs on their products, many other countries put customs duties on American goods, which reduced American exports.

Agriculture

For many American farmers, life in the 1920s was a constant struggle against poverty. During the First World War, farmers had been encouraged to grow as much food as they could. They continued to do this in the 1920s until they had produced more cotton and wheat than they could sell.

As prices dropped, many farmers lived in unhygienic conditions in tin shacks, without electricity or running water. In 1929, when the average monthly income of a skilled manufacturing worker might be $140, farm labourers were earning only $49 a month.

Social problems

People who were wealthy in America were extremely rich, but few people shared in this prosperity. Only 5 per cent of the American population owned a third of the wealth, while 42 per cent of the population were living below the poverty line.

Racism

Before the First World War, many Americans saw their country as a melting pot in which people of different nationalities, races and religions could live in harmony. The Statue of Liberty symbolised the welcome offered to the huddled masses as they entered America. Yet, there were signs that this mood of tolerance was under attack.

The revival of the Ku Klux Klan was a frightening development. The Klan believed in the superiority of the white race. Its members wore white gowns and pointed hats, and burned large crosses as a symbol of their presence. The revival of the Klan started in the Deep South, but spread to other parts of America.