Question

Why was the American economy in the 1920s suddenly in shambles?

Answer 1

The USA's world position after the First World War. It was owed money by European countries, it had raw materials in abundance. Its economy was massively more secure than that of any other country's. Share confidence, assembly line, new technological knowledge. New affordable consumer goods, effective advertising.The rich and the middle classes got richer, the poor remained poor. In 1929, 1/3 of all income was received by 5% of the workforce.

Answer 2

The stock market crash of 1929 (not the sole cause of the Great Depression, but it did act to accelerate the global economic collapse) was a symptom. By 1933, nearly half of America's banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce.

Hope this helps!