Bitesize has changed! We're updating subjects as fast as we can. Visit our new site to find Bitesize guides and clips - and tell us what you think!


The rise and fall of the American economy, 1910-29

How did this prosperity affect American society?

Who did not share in the boom of the 1920s and why?

Who did not share in the boom of the 1920s and why?

Groups and sectors that did not prosper


Farmers were producing too many crops and couldn’t sell them. So prices fell and farmers had to borrow money from the banks to be able to survive. More and more of them got into debt until they eventually had to sell their farms and leave. Many left to go wandering around America looking for any kind of work – these wanderers were called hobos [Hoboes: Workers who travelled around the country looking for work. ].

Go to the the Erroluys website and make notes of all the factual information you can find there about hobos.

By 1928 half of all USA farmers were living in poverty. Since prices were so low, 600,000 farmers lost their farms in 1924 alone.

Black people

Black people suffered economically, especially in the southern states, where segregation [Segregation: Laws separating black and white people in public places in society. ] was in effect. The ancestors of the black people in the south had been slaves. The majority worked on small farms owned by white landlords. The black people were labourers or sharecroppers [Sharecroppers: Black farmers who had to pay for the land by giving a proportion of their produce to the owner. ] and they lived in immense poverty.

The segregation that was happening in the southern states (Alabama, Louisiana and Mississippi) made the situation of black people even worse. White and black people lived separately – they had different education, transport and housing facilities. They were not allowed to use the same toilets and water wells. Anyone who tried to improve the rights of African Americans were challenged and threatened by the Ku Klux Klan. As a result, thousands of black people moved to northern cities like New York, Detroit and Chicago to look for work, but when they got there they had to live in ghettoes.


Many immigrants had not been educated and were willing to work in any kind of job for very low wages. Because of this, they endured more and more prejudice.

Old traditional industries

The traditional industries failed to respond to the new mass-production methods of the 1920s, unlike the Ford company that was making a good profit and could pay impressive wages. Also, following a reduction in the powers of Labor Unions [Trade Unions: Workers joining a union to protect their working rights. ] (Trade Unions), the workers were not in a position to be able to claim better wages and working conditions in the old industries.

  • Coal - Coal prices fell and thousands had to be made redundant because the industry was producing too much coal and not enough people and countries wanted to buy it.
  • Ship building - Another major industry that had to make thousands redundant due to a reduction in the demand for new ships.
  • Cotton - New synthetic fibres were being developed, such as rayon. This became a very popular substitute to cotton. It was possible to produce rayon in factories where fewer workers were needed.


Not everyone was rich in America during the 1920s. Can you name five groups of people who were not rich?

Summary of the effects of the boom

People who felt the benefits of the boomPeople who didn't benefit from the boom
Owners of consumer goods factoriesFarmers
Assembly line workersSharecroppers
White people in the citiesBlack people
Speculators on the stock marketPeople in rural areas
Early immigrantsCoal miners
Middle class womenTextile workers
BuildersNew immigrants

Back to The USA, A nation of contrasts, 1910-1929 index

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.