Mass production needed mass consumption. Because of this, companies had to advertise their products to mass audiences. The 1920's ushered in a massive advertising boom. Advertising agencies specialized in creating slogans and advertisements to attract customers. Businesses paid to place their ads on radios, newspapers, billboards, magazines, and street signs. Americans could receive catalogs directly to their homes and department stores began to develop in large cities, giving people a place to purchase several different items under one business.
Installment buying became extremely popular in the 1920's. This meant consumers could pay for their items in installments (like credit) by placing a small down payment on whatever item they wished to purchase. People used this to purchase refrigerators, cars, and other household items. Consumers also starting buying goods on credit. |
Speculation is when you buy something with the intention of reselling it later for a higher price to make an income. Stocks are a way for people to invest in a company by becoming a shareholder. If you own a stock, you have the right to sell it at any time to someone else.
In the 1920s, speculation in stocks was very high. As stocks went up in value, more people purchased them. Everyone was investing to get it on this fad and try and get rich. Unfortunately, many people were purchasing stocks on margin, meaning they only paid 10% of the price of the stock and promised to pay the rest later. As your Gateway Book states on page 203, "With buying on margin, the stock market was quickly turning into a national casino." |