American Depression

American Economy in the 1920s United States was world’s leading economic power because of WWI, farms & factories supplied world – fed & supplied Allied soldiers

American Economy in the 1920s value of stocks skyrocketed around 400% new products for the common man – automobiles – radios – vacuum cleaners – washers

Hidden Problems wealth distribution – richest 1% of population earned 19% of nation’s income – top 200 companies held more than 50% of corporate wealth credit – borrow money to pay for items and promise to pay back that money

October 29, 1929 Black Tuesday – spending slowed – nervous investors sold their stocks feared stock prices would drop because products were bought as often Great Depression : severe downturn in American economy following 1929 stock market crash

Outcomes of Crash investors = ruined banks = in trouble – loans to ruined investors or companies who saw decreased spending couldn’t be paid people = in trouble – money invested in bank wasn’t insured

Investors lost money when stock market crashed & businesses went bankrupt Banks lost money when people/investors & businesses couldn’t repay credit/loans Businesses lost money when people bought less goods & investors stopped investing People lost money when banks closed & when lost jobs

Depression Spreads 1933  1 of every 4 workers out of jobs – fewer people could buy food/goods from market, hurting economy even more bank failure – lost money when loans went unpaid no insurance for customers

ADD TO TERMS!!! add to Section 2 of terms packet Hoovervilles: collection of huts & shacks as at the edge of a city, housing the unemployed during the 1930s