Depression of 1920–21

The Depression of 1920–21 was a brief but severe economic downturn in the United States caused by post-World War I adjustments. After the war, industries faced overproduction, and consumer spending dropped. Banks tightened credit, and agricultural prices fell sharply, leading many businesses and farmers into bankruptcy. Unemployment rose quickly, and the stock market declined. However, the economy recovered faster than usual, partly due to government policies like increased public spending and tax cuts, which helped restore confidence and stimulate growth within a couple of years.