Presentation on theme: "N OVEMBER 4, 2013 1. Begin Unit IV: The 1930’s (The Great Depression and the New Deal) 2. 22.1 Notes (part 1) Election of 1928 3. 22.1 Vocabulary 4. Unit."— Presentation transcript:
N OVEMBER 4, 2013 1. Begin Unit IV: The 1930’s (The Great Depression and the New Deal) 2. 22.1 Notes (part 1) Election of 1928 3. 22.1 Vocabulary 4. Unit III (1920’s) Exam Results and Grades
U NIT IVTHE GREAT DEPRESSION & THE NEW DEAL 1929-1941 Chapters 22 & 23
22.1 Causes of the Great Depression Causes of the Great Depression
P RESIDENTIAL E LECTION OF 1928 Three P’s were the major issues in election of 1928. 1. P for Prosperity: Economic success of 1920’s led by Republican Presidents (Harding and Coolidge.) 2. P for Prohibition: Major issue in U.S. throughout 1920’s and in election of 1928 (wet vs. dry) 3. P for Protestantism: Catholic vs. Protestant in 1928.
E LECTION OF 1928 Republican: Herbert Hoover (8 years as Secretary of Commerce under Harding and Coolidge.) Democrat: Alfred E. Smith (3 time Progressive Gov. of NY) Smith was first Catholic to run for President. Hoover was a “dry” Quaker. Smith was a “wet” Catholic. Prosperity of 1920’s paved way for another Republican and Hoover won big. By 1928- many signs of economic troubles...
N OVEMBER 6, 2013 1. Continue 22.1 Notes: Stock Market Crash of 1929 2. 22.1 Guided Reading Q’s
1920’ S S TOCK M ARKET Throughout 1920’s, people bought items (electric appliances, radios, cars) using installment plans. Companies prospered as people accumulated debt. Stock Market: system of buying and selling shares in a company. By 1929, nearly 4 million Americans (3%) owned stock in various companies. 1920’s stock market was a Bull Market: period of rapidly rising stock prices.
S TOCK M ARKET You buy part of the company. Speculating: invest in stocks in the hope of gain but the risk of loss. Bull Market vs. Bear Market Stock price is dependent on its’ business model, customer base, the industry, the economy, etc. High stock prices of late 1920’s motivated more people to invest.
N OVEMBER 8, 2013 1. Continue 22.1 Notes: Stock Market Crash of 1929 2. 22.1 Guided Reading Questions 3. 22.2 Vocabulary 4. Return Work
B ULL M ARKET SPARKED BY … Growth in American industries Technological progress Increase in productivity Rise in national income from 33,200 million to 79,200 million from 1914 to 1925 Expectation for great future and un-boundless optimism for the market
1920’ S S TOCK M ARKET Many people bought stock on margin (10-20% down, monthly payments follow) If price of stock fell below loan amount, stockbroker could issue a margin call: demand investor to repay loan immediately. Investors were sensitive to a drop in stock prices and would sell, even if the stock was worth less than what they paid for it. By late 1920’s, many NEW investors bid prices up. Many companies and banks invested also!!!
T HE G REAT C RASH Bull Market lasted as long as investors continued putting new money in to it. Late 1929: Stock Market running out of new investors. Many investors began selling some of their share and priced dipped. As days went on, more investors did the sam and prices dipped further. October 24 th : Black Thursday: Market significantly dipped; many brokers issued Margin Calls. 12,894,650 shares were traded October 29- Black Tuesday Stock market crashes-16 million shares were sold @ far less value than purchased- The Great Crash.: By mid-November, 1929: $30 Billion was lost.
B ANKS C OLLAPSE Crash sparked a series of events that led to the Great Depression: Banks Collapse for 4 reasons. 1. loaned money to stockholders who will default. 2. invested customers $ in market. 3. Not repaid on other loans therefore stop giving out any future loans. 4. Because of rumored bank failures, people quickly tried to withdraw their money from the banks: Bank Runs. By 1931- 1,700 banks closed.
O THER C AUSES OF THE D EPRESSION 1. OVERPRODUCTION OF GOODS (Factories and Farms) Most Americans did not earn enough $ to buy all of the goods made or they already had everything then wanted. Output increased at a higher % than worker wage increases. Lower consumption meant less production which lead to employee layoffs. Corporate profits grew however, leading to Uneven Distribution of Wealth.
O THER C AUSES OF T HE G REAT D EPRESSION 2. 2. Businesses close. In order to stay in business they must layoff workers-unemployment rises. Henry Ford had to layoff 75,000 people. By 1933, about 25% of Americans were unemployed.
O THER C AUSES OF THE G REAT D EPRESSION 3. 3. Tariffs Government tried to stimulate the economy by protecting American products. June, 1930: The government passed the Hawley-Smoot Tariff European countries retaliated by enforcing their own tariffs on U.S. products. Lack of trade hurt the economies of both America and the world. What about German reparations and British and French loan payment to the U.S.?????
R EVIEW & F RIDAY WITH THE S UB Stock Market Basics Stock Market Crash (October, 1929) Banks collapse (over 9,000 total) Other Factors: 1. Overproduction of goods on factories and farms 2. Uneven Distribution of Wealth 3. Businesses close leading to High Unemployment. 4. Tariffs- Hurt International Trade. 22.2 Vocabulary: Life in the Depression