After the First World War the United States was in a strong economic position. The economies of her European rivals had been severely disrupted by the war and US companies were able to capture markets which had previously been supplied by countries like Britain and Germany.

Companies in the United States also began to make full use of what became known as mass production. Between 1919 and 1929 output per worker increased by 43%. This increase in output enabled America to produce items that were cheaper than those manufactured by her European competitors. Inflation remained low while incomes increased by an average of 35% during this period.

The United States also pioneered techniques in persuading people to buy the latest products. The development of commercial radio meant that companies could communicate information about the goods to a mass audience. In order to encourage people to purchase expensive goods like motor cars, refrigerators and washing machines, the system of hire-purchase was introduced which allowed customers to pay for these goods by installments.

The American economy appeared to be in such a healthy state that in 1928, Herbert Hoover, the man who was soon to become President of the United States, was able to claim that: "We in America are nearer to the financial triumph over poverty than ever before in the history of our land."