20’s Boom

New Trends Writers of the 20’s referred to as the “Lost Generation”, wrote about materialism and consumerism Babe Ruth – baseball player for Yankees Jazz Singer was the first motion picture to have sound Charles Lindberg- First to complete solo transatlantic flight on the Spirit of Saint Louis

Stock Market Stock Prices rose to new highs during the 20’s People thought it would last forever

Consumer Trends installment plan buying – buying an item using smaller payments until the full price is paid product remains with retailer buying on credit – receiving a loan to pay for an item that generates a debt that you agree to repay later, product of the item is with the buyer

Government policies Laissez-Faire- Government stayed out of the economy and let it run its course.

Speculation Speculation is the idea of buying stock hoping the price would go up so you could sell it at the higher price buying on the margin – buying a full share of stock for the fraction of the cost margin call – a call to pay the difference between the fraction you paid for a stock and the full price

Bank Loans many banks loaned money to speculators who hoped to strike it rich of their investment

Herbert Hoover Andrew Mellon – Secretary of the Treasury under Harding, Coolidge and Hoover who believed in trickling down/supply-side economics supply-side economics – lowering taxes boost the economy

1929 By 1929 prices fell Causes: technology and mechanization replaced many workers (people lost jobs) more goods produced than people could buy or afford businesses sold less causing stock to drop stockbrokers began making margin calls customers sold their stocks

Black Thursday Black Thursday – stock prices plummeted further Black Tuesday (Oct. 29th) – stock prices fell by more than $10-$15 billion  $30 billion by November