The Nation’s Sick Economy Chapter 22 Section 1 Notes

End of an Era End of 1920’s Serious Problems –Industries struggled –Farmers grew more than they could sell

Problems with business Industry Not making Profits wartime Industries no longer needed Loss of new Homes –Signals a loss of Jobs –Trickle Down Effect? Farming High prices and demand no longer around To many loans Lost farms due to debt Price supports –Gov’t would buy excess grain –Vetoed twice!!!!!!!

Consumers Issues Consumers have less Money –Low wages, Less income, buying less Living on Credit –Went into deep debt, could not pay it off, had to cut spending Uneven distribution of Income –Production out paced wages: Explain????? –Goods being made that no one can buy!!!!!

Election of 1928 Herbert Hoover –Never ran for public office –Was a republican –Won easily –Said the country was great

The Stock Market Americans put money in the stock market Dow Jones Industrial Average Good Times –Bull Market: Prices going up –Investors and common people buying stocks Problems –Speculation: Buying and hoping for a quick gain –Buying on Margin: Only paying a small part of the stocks price and borrowing the rest

Stock Market Crash Sept., Oct. of 1929 –Stocks plunge Black Tuesday –Oct. 29 –Everyone wanted to sell, no one wanted to buy –Mid-November: $30 billion gone –People lost EVERYTHING

Financial Collapse Banks Failed –People could not get money –Banks had invested in stock market Business Failed –Nations out put of goods cut in half –90,000 Business’s go bankrupt –25% of people lost their job –Jobs: Pay cuts, reduced hours

Causes of the Depression Tariffs and war debts hurt foreign trade Crisis with farmers To much credit available Unequal distribution of income