The Rise And Fall Of The US Economy

During the colonial era, the United States had a reliable supply of naturally produced resources like coal, timber, minerals, iron, land and oil. The enabled the American economy to grow drastically in the early twentieth century. The supply of these natural resources was the backbone to the United States economic power.

The Rise of US Economy

The supply of natural resources led to drastic development of production industries in America. In fact, this is the period which registered highest rate industrial growth in the history of the America. More jobs were created which attracted high incomes to the American community. Electrical supply as well grew at a very high rate. As a matter of fact, before the end of the 1929, almost every home in United States had electricity.

High incomes and development of employment opportunities provided Americans with high purchasing power. Moreover, development of purchasing systems such as hire purchase enabled the citizens affords expensive products. The development of the car industries also played significant role in the growth of American economy. Actually, before the beginning of the economy down in 1929, almost every adult American had a car.

The presence of virgin land and cheap labor from the slave trade increased agricultural production which ensured reliable supply of farm products. As a result of high mechanization and huge supply of electricity, mass production became possible. The development street wall banks led to high circulation of capital and hence high returns on capital.

The fall of US Economy

The high growth of industries in United States led to production of excess consumer goods which were left unsold. Much of these products went into waste resulting to huge loses to the production firms. The Europe nations enactment of import policies as well play significant role in the downfall of the American economy. The Europe nations induced high import duties on American products making them more expensive compared to their locally products. America therefore had limited markets to sell their excess products which really affected the production firms.

The American financial ministry also contributed to the fall of the economy. It failed to ensure strict measures to control money in circulation. In fact, it failed to open central bank but instead encouraged development of many small banks, wall streets. As a result, when the Wall Streets crashed, most of these banks closed leaving many people with no money at all. This signified the beginning of the economic Great Depression which was the greatest economic downfall in the history of the world.