Presentation on theme: "Crash & Depression Section 1 The Economy in the Late 1920s During the 1920s, rising wealth and a booming stock market gave Americans a false sense of faith."— Presentation transcript:
Crash & Depression Section 1 The Economy in the Late 1920s During the 1920s, rising wealth and a booming stock market gave Americans a false sense of faith in the economy.
The Economy Appears Healthy When Hoover became President 1928, everyone expected the economy to remain strong.
Economic Danger Signs 1.Uneven Prosperitythe rich got richer. 2. Buying on Creditpeople bought products whether they could afford them or not.
3.Playing the Stockmarket speculationthe practice of making high-risk investments Buying on marginbuying stock on credit. 4. Too Many Goods, Too Little Demandoverproduction caused some industries to slow in the 1920s.
5.Trouble for Farmersafter the war, the price of agricultural products dropped. 6.Trouble for WorkersWhile companies grew wealthy, most laborers still worked long hours for low wages.
Section 2 The Stockmarket Crash In October 1929 panic selling caused the U.S. stock market to crash. The crash led to a worldwide economic crisis called the Great Depression.
The Market Crashes 1.Black Thursdaysome stock prices began to fall and some brokers began to call in loans. 2. Black TuesdayOctober, 1929, a record 16 million shares were sold.
The collapse of the stock market is known as the Great Crash. Business cycleperiods in which the economy grows, then contracts. Brokers and banks called in their loans, but people did not have cash to pay them.
The Crash Affects Millions Great Depressiona severe economic decline that lasted from 1929 until the U.S. entered WWII. Gross National Product(GNP) the total value of goods and services a country produces annually.
1.Banks CloseThousands of banks closed their doors when they could not return their depositors money. 2. Impact on the WorldWhen the U.S. economy fell, the global economic system began to crumble.
Causes of the Depression 1. Overspeculation 2. Government policies 3. An unstable economy
Section 3 Social Effects of the Depression Most people were not immediately affected by the 1929 crash. But by the early 1930s, wage cuts and unemployment brought widespread suffering.
1. HoovervillesThe hardest hit were those at the bottom of the economic ladder. Homeless people sometimes built shanty towns, with shacks of tar paper, cardboard, or tin. They were called Hoovervilles.