Full Text

recession of the 1920s

Subject History

Place Northern America » United States of America

DOI: 10.1111/b.9781577180999.1997.x


The end of W orld W ar i caused the federal budget to decline from $18.5 billion in 1919 to $6.4 billion in 1920. Although this decline in budgetary stimulus required an increase in investment and spending by the private sector, Congress raised taxes on individuals and corporations, while the Federal Reserve Bank restricted credit by raising its discount rate for member banks from 4.75 percent to 7 percent by 1920. Unemployment rose from 4.0 percent in 1919 to 11.9 percent in 1921, but subsided to 7.6 percent in 1922 and 3.2 percent in 1923. The recession contributed to the failure or merger of 2,024 banks (6.5 percent of the total) by 1925. The economy's industrial and commercial sectors revived after 1921, but agriculture did not. Farm prices dropped sharply as world output rose after the war, and US farmers responded by overproduction, which created surpluses that drove commodity prices progressively downward through the 1920s. Farm income dropped from 15 percent of national output in 1920 to 9 percent in 1928; 454,866 owner-managed farms disappeared in the 1920s, and the farm population decreased by 3,000,000. The agricultural depression led to the closure of 5,400 rural banks during the decade. ... log in or subscribe to read full text

Log In

You are not currently logged-in to Blackwell Reference Online

If your institution has a subscription, you can log in here:


     Forgotten your password?

Find out how to subscribe.

Your library does not have access to this title. Please contact your librarian to arrange access.

[ access key 0 : accessibility information including access key list ] [ access key 1 : home page ] [ access key 2 : skip navigation ] [ access key 6 : help ] [ access key 9 : contact us ] [ access key 0 : accessibility statement ]

Blackwell Publishing Home Page

Blackwell Reference Online ® is a Blackwell Publishing Inc. registered trademark
Technology partner: Semantico Ltd.

Blackwell Publishing and its licensors hold the copyright in all material held in Blackwell Reference Online. No material may be resold or published elsewhere without Blackwell Publishing's written consent, save as authorised by a licence with Blackwell Publishing or to the extent required by the applicable law.

Back to Top