Presentation is loading. Please wait.

Presentation is loading. Please wait.

Great Depression Begins. The Economy of the Late 1920’s  1928 Election showed faith in the Republican Party. Herbert Hoover defeated Al Smith (D). 

Similar presentations


Presentation on theme: "Great Depression Begins. The Economy of the Late 1920’s  1928 Election showed faith in the Republican Party. Herbert Hoover defeated Al Smith (D). "— Presentation transcript:

1 Great Depression Begins

2 The Economy of the Late 1920’s  1928 Election showed faith in the Republican Party. Herbert Hoover defeated Al Smith (D).  Welfare Capitalism – Employers undermined labor unions by giving more benefits to workers. Wages up more than 40% and unemployment was under 4%. Consumption was up and American confidence was up.  1925 Stock Market = $25 Billion by Oct = $87 Billion! “Everyone could be rich if they invested $15/ week for 20 years = $400 per month income until they died! “

3 FARMERS STRUGGLE  No industry suffered as much as agriculture  During World War I European demand for American crops soared  After the war demand plummeted  Farmers increased production sending prices further downward Photo by Dorothea Lange

4 CONSUMER SPENDING DOWN  By the late 1920s, American consumers were buying less  Rising prices, stagnant wages and overbuying on credit were to blame  Most people did not have the money to buy the flood of goods factories produced

5 GAP BETWEEN RICH & POOR  The gap between rich and poor widened  The wealthiest 1% saw their income rise 75%  The rest of the population saw an increase of only 9%  More than 70% of American families earned less than $2500 per year Photo by Dorothea Lange

6 HOOVER WINS 1928 ELECTION  Republican Herbert Hoover ran against Democrat Alfred E. Smith in the 1928 election  Hoover emphasized years of prosperity under Republican administrations  Hoover won an overwhelming victory

7

8 Young Hoover supporter in 1928

9 1. The Rich got Richer and the Poor became less Poor!  0.1% of Americans had incomes over $100,000 & they had over 34% of all savings accounts.  71% of families earned $2500/ yr. or less.  Workers were 40% more productive, but paid only 8% better!  1% made $10,000 +/ yr.

10 2. Easy Credit Hides the Gap Between the Rich and Poor – temporarily!  Buying on Time and Installment Plans allowed people to spend money they didn’t have and people lived beyond their means (radios, cars, appliances, etc.)!  Personal Debt Skyrocketed during the 1920’s!

11 3. Speculation on Stocks in the Bull Market of the 1920’s!  Easy Credit led to Buying on Margin – 10% - 50% per share of stock up front and borrow the rest at high interest!  Very risky, but as long as prices rose it was win/ win for everyone!  Brokers could call in margins anytime.  Led to inflation of stock prices!

12 4. Overproduction Led to Layoffs!  Overproduction caused many durable goods to stockpile in warehouses!  The auto industry began to slump after 1925 and related industries suffered too.  Massive layoffs of workers resulted!  Banks were hurt too!

13 5. Farmers Suffered Earlier and More Often During the 1920’s!  Farm prices fell from lofty heights after WW I (1914 – 1918)!  One-fourth of America’s workers were farmers!  Farmers often had to overextend on credit to survive.  6000 Rural Banks before the 1929 Crash!  Farmers too overproduced!

14 Exit Slip – Causes of the Depression 1. T or F: Stock prices rose steadily during the 1920’s. 2. T or F: Most American families earned more than $2500 a year during the 1920’s. 3. T or F: Credit was harder to get for most Americans during the 1920’s. 4. T or F: Farmers prospered during the 1920’s as they had during WW I as farm prices continued to rise throughout the decade.


Download ppt "Great Depression Begins. The Economy of the Late 1920’s  1928 Election showed faith in the Republican Party. Herbert Hoover defeated Al Smith (D). "

Similar presentations


Ads by Google