Immediately after World War I, the United States experienced a series of economic shocks. They began with rampant inflation, as prices jumped by one-third in 1919 alone. Then came a two-year recession that raised unemployment to 10 percent. Finally, the economy began to grow smoothly, and more Americans began to benefit. Between 1922 and 1929, national per capita income rose an impressive 24 percent.

Large-scale corporations continued to replace small business in many sectors of the economy. By 1929, through successive waves of consolidation, the two hundred largest businesses had come to control almost half of the country’s nonbanking corporate wealth. The greatest number of mergers occurred in rising industries such as chemicals (with DuPont in the lead) and electrical appliances (General Electric). At the same time, mergers between Wall Street banks enhanced New York City’s position as the financial center of the nation and increasingly the world. Aided by Washington’s dollar diplomats, U.S. companies exercised growing global power. Seeking cheaper livestock, giant American meat-packers opened plants in Argentina; the United Fruit Company developed plantations in Costa Rica, Honduras, and Guatemala; General Electric set up production facilities in Latin America, Asia, and Australia.

Despite the boom, the U.S. economy had areas of significant weakness throughout the 1920s. Agriculture, which still employed one-fourth of all American workers, never fully recovered from the postwar recession. Once Europe’s economy revived, its farmers flooded world markets with grain and other farm products, causing agricultural prices to fall. Other industries, including coal and textiles, languished for similar reasons. As a consequence, many rural Americans shared little of the decade’s prosperity. The bottom 40 percent of American families earned an average annual income of only $725 (about $9,100 today). Many, especially rural tenants and sharecroppers, languished in poverty and malnutrition.