2.  Farming suffered  Gross National Product (GNP) increased by 30% (in 1920s) because rapid growth > optimism  Unemployment low (~3%) because companies had to keep up with demand

3.  Place where stocks are bought & sold  Stock: ownership in company > sold in shares  So buying shares of stock = buying a piece of the corporation  In the 1920s, overall value of stocks quadrupled  More ordinary Americans began investing in stocks  Why is this important?

4.  Prosperity of 1920s reflected success of Presidents Harding & Coolidge’s pro- big business policies  “The chief business of the American people is business.” Coolidge  Term for no gov’t intervention in business or “hands off” is…

5. CandidateHerbert HooverAl Smith PartyRepublicanDemocrat CharacteristicsQuiet, shy, business-like Outgoing, natural politician ReligionQuakerCatholic = 1 st time Stance on prohibition Supports prohibition Supports alcohol sales

7.  Poor Distribution of wealth  Wealthiest 1% income grew 60% while rest only 8%)  1929, 70% of families income below standard of living  Credit  Buy on margin (pay in installments) ▪ Investors used credit to purchase stocks > risky

8.  If I want to buy 100 shares of Company A at $10 per share, it would cost $1000.  If I pay $500 and borrow $500 from a stockbroker, I plan to pay off the stockbroker when I sell the stock.  What happens if the value of the stock increases?  What happens if the value of the stock decreases?  Like the housing market a few years ago.

9.  Federal Reserve  Created in 1913 under Pres. Wilson (bank for gov’t)  Nation’s central bank made it harder to get loans after concern with stocks & buying on margin >  Credit dried up >  Consumer spending decreased >  Industries struggled

10. What is the irony of this advertisement? What do you notice about this picture? What impact do you think that had on society?

11.  Stock market heavily used in mid- 1920s  Speculation in stocks increased  Margin buying encouraged by Federal Reserve policies  Stock prices > unrealistic levels  Stock market crash  Black Tuesday (Oct. 29, 1929)

13. On individualsAlmost all suffered; lost savings; > debt On banksDepositors withdrew $; lost $ from stocks & loans; 1933 – 5,000 banks closed On businesses Blow to struggling businesses because banks cut off & consumers cut back; 1930 Americans saw wages drop by $4 billion; 3 million Americans lost jobs

15.  Depression spread throughout Europe  Still recovering from WWI  American banks called in loans  Foreign businesses laid off workers  Gov’t (including U.S.) passed high tariffs to protect industries  Ex. Smoot-Hawley Tariff

16.  Use your textbook to answer the following on a SEPARATE piece of paper 1. Read the “Inside Story” pg. 335 & explain the causes & effects of the Bonus Army. 2. Discuss the 2 key ideas of Hoover’s philosophy a. Rugged individualismb. Associative state 3. What pattern of economic governing did Hoover continue from Harding & Coolidge? 4. List at least 3 actions Hoover took in response to the Great Depression 5. How were cooperatives supposed to help farmers? a. Why did cooperatives backfire?

17. 6. Answer the question for the political cartoon on pg. 337 7. What was the purpose of the Reconstruction Finance Corporation (RFC)? a. Why is that a problem? 8. What was the purpose of the Smoot-Hawley Tariff? a. Explain the result. 9. How did the nation respond to Hoover’s efforts? 10. Read “Faces” on pg. 338 and answer the question 11. Read the excerpt below the picture on pg. 339 – How did the public respond?