The Great Depression Causes Review.

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Presentation transcript:

The Great Depression Causes Review

Problems during the “Prosperous” 1920s Farmers had too much livestock and food to sell Railroad, textiles, and steel industries losing business toward end Mining and lumber not in as much demand Consumer industries slowing New forms of energy and transportation meant decline in formerly major industries

Farmer Problems Farmers did very well during WWI, so they bought new equipment and developed ways to make A LOT of their crops Now farmers aren’t selling as much, and they can’t pay off their loans Small town banks begin to fail due to lack of being paid back (no money to give out when they aren’t getting it in)

Resolution? McNary-Haugen Bill Government intervening in the farm industry to buy up extra crops and sell them to other countries. Was vetoed twice

Consumer Problems People not buying as much Credit debt No rise in pay Uneven Distribution of Wealth Rich getting richer Poor getting poorer (70% earning less than $2500 a year) Only ½ of houses have electric lights Many people too poor to pay for all the glitzy new items of the 1920s

The Election of 1928 Hoover was the secretary of commerce and had a decade of wealth under Republicans backing him up “We in America are nearer to the final triumph over poverty than ever before” Hoover won by a landslide

The Stock Market Stock – you buy a “share” of a big company You invest in their company, they share the wealth. The better the company does, the more you get in return, so the more expensive the stock Dow Jones Industrial Average Thermometer of stock market (how some of the top 30 companies are doing based on what their stocks sell for) In the late 1920s, stocks keep rising, people making money, others get excited about buying shares

How the Stock Market Works www.youtube.com/watch?v=_2Kt4moES0U Stock Market Then and Now Read “Now and Then: New York Stock Exchange” Page1321 in textbook

Disaster Many people hoped to get rich quick on stocks Buying on Margin – putting down a down payment and borrowing rest of money for the stock Stock prices went up and up but companies weren’t necessarily doing any better BLACK TUESDAY Prices started dropping on stocks, so people frantically tried to sell theirs off before they lost any money People who bought on margin were stuck with huge debts

Black Tuesday

http://www.history.com/topics/1929-stock-market-crash/videos#1929-stock-market-crash www.youtube.com/watch?v=EOzMdEwYmDU‎

Finish Taking Notes “Financial Collapse” pg 1322-1324 Take NoTeS Look at the interactive features Take the Quiz WRITING [In Synthesis Paragraph portion of notes] summarize by answering Critical Thinking Question #3.