ough factory workers income rose during the twenties unemployment continued to be high, mass production allowed employers to produce more with fewer workers. There were no federal programs like unemployment or welfare assistance to aid unemployed workers therefor poverty rose and peoples purchasing power fell. Another problem was foreign economic lending that had taken place during W.W.I America had become the primary lender to the allies, and after the war many were unable to pay their debts especially Germany. In order for nations in debt to profit they had to export more than they were importing, and the creditor had to import more than they were exporting, this was not the case with America. They continually had trade surpluses with their European allies. They also imposed high tariffs to protect their industry and make it impossible to have equal exchange with its allies.(2) The other thing the government did was continue to make loans, and encourage private lenders to make loans to foreign businesses so they could pay their debts, and buy American goods. This didn't make sense to me, it seemed that we would be getting paid with our own money. As times got hard lenders refused to make loans, and demanded payment on loans they had already made. This forced many foreign companies to go into default. The purchase of American goods stopped, causing many American businesses that relied on foreign purchases to suffer. Farmers suffered the most.
             As things continued to decline in America and over seas it was evident that the time of prosperity was over. Economic instability had started to affect the stock market. The market continued to ignore the failing economy. Stock prices continued to soar, and business leaders forecast a rapid recovery. On October 2, 1929 millions of shares of common stock went up for sale this made brokers nervous, the market lost over four billion that day. No one knows what sparked this mas...