Weaknesses of the US economy

• Many groups, such as women, Native Americans and African Americans, didn't prosper during the economic boom
• Wealth was concentrated in the North-East and Far West, with the South-East remaining the poorest
• In 1929, the income per capita was $921 in the North-East and only $365 in the South-East
• The 1929 Brookings Institute found income inequality was worsening, with 60% of families earning less than $2000
• Robert S Lynd and Helen Lynd found most people regardless of social class shared conservative social values of overcoming problems through hard work
• Women mainly worked lower-paying jobs, with 700 000 working as domestic servants
• Legislation aimed to help women like the 1921 Sheppard-Towner Act, which funded healthcare for pregnant women, was criticised by suffragists
• Policy towards Native Americans was dictated by the 1887 Dawes Severalty Act: assimilation and allotment
• African Americans were 10% of the population, but 85% of them lived in the poorer South. Migrants were subject to discrimination and overcrowding in the North
• The price of wheat had fallen from $2.50 per bushel to only $1
• During the 1920s, farm population fell by 5% but production increased by 9% because of technological advances in agriculture
• Overproduction became an issue and prices fell below the 1914 'parity' (break-even) price
• Up to 66% of farms operated at a loss
• Most government tariffs were made to protect industry, rather than agriculture
• The 1921 Emergency Tariff Act and the 1922 Fordney-McCumber Act placed heavy tariffs on food imports, but this only inspired retaliatory tariffs from other countries
• Older industries concentrated in Illinois, Michigan and Pennsylvania like coal, cotton and the railways were outcompeted by oil, synthetic fibres and motor transport
• Demand for goods fluctuated, creating employment instability
• In 1924, 43% of workers had been jobless for over a month at some stage, when there was little welfare
• Unions did not receive government protection and many employers imposed 'yellow dog' clauses on their employers, which meant that they couldn't unionise
• By 1930, only 7.1% of industrial workers, were a member of a union
• Credit and large-scale speculation were common
• People bought land in Florida, investing in unseen development they hoped to quickly resell
• People paid on credit, with only a 10% 'binder'
• The Florida land boom required more buyers than sellers. Demand tailed off by 1926
• Investment in the stock market grew in 1927, particularly as speculation of prices increasing to resell became popular
• Stock in the Radio Corporation of America rose from 85 to 420 in 1928
• 1.5 million ordinary people invested
• Bethlehem Steel Corporation invested $157 million in the market by late 1929. This could lead to bankruptcy
• The central banking system was only created in 1913
• 12 regulatory reserve banks, headed by the Federal Reserve Board, were created to allow banks to regulate themselves without government interference
• The reserve banks represented the interests of bankers, not the people
• The Federal Reserve Board kept the market buoyant through low interest rates. This fuelled easy credit
• Local banks, which made up the majority of the USA's 30 000 banks, did not have to join the centralised system. They were too small to cope with financial problems
• Small businesses were outcompeted by large corporations; for every 4 that succeeded, 3 failed
• The number of motor companies fell from 108 in 1920 to only 44 in 1929
• Overproduction was growing as demand lessened
• Full-time employment was decreasing, with 80% of people living close to subsistence even when employed in 1929
• The economy was entering a downward spiral