1. The Nation’s Sick Economy 14.1
The Great depression
The Nation’s Sick Economy 14.1

2. BIG IDEAS
MAIN IDEA: As the prosperity of the 1920’s ended, sever economic problems gripped the nation.
WHY IT MATTERS NOW: The Great Depression has had lasting effects on how Americans view themselves and their government.

3. Industries In Trouble
While life of the 1920’s appeared to prosperous in reality several major industries were failing to make a profit.
Railroads lost business to new forms of transportation
Mining and lumber were no longer in high demand with the end of the war
Coal was being replaced by new forms of energy
The number of houses being built began to decline

4. Farmers need a lift Farming industry booms during war
Post-war need for crops decreases by 40%+
Farmers cannot pay debts—banks close
Price supports by the government promise to buy excess crops at a set price

5. Consumers have less to spend
Americans overall were buying less because of rising prices, stagnant wages, and the uneven distribution of wealth
The gap between the rich and the poor is growing– 70% of U.S. families are living on less than $2,500 a year
Credit (buy now pay later) lifestyles of the 1920’s left many people in debt they could not pay off

6. The Election of 1928 Herbert Hoover (R) Alfred E. Smith (D)
Secretary of Commerce under Harding and Coolidge
Mining engineer from Iowa
Ran on the coat tails of the republicans
“We in America are nearer to the final triumph over poverty than ever before”
Life long politician
4 terms as Governor of New York
Lost Democrats in the south partly because he was a Catholic

7. American Dreams of Riches in the Stock market
Many American are investing any excess money stocks or shares of ownership in company
Stock prices were steadily rising in the 1920’s but problems quickly appeared
Speculation: ignoring risks and buying stocks with the chance of a quick profit
Buying on margin or buying stocks with a down payment and barrowing the rest
Little government regulation
Dow Jones Industrial Average: measures the health of the stock market based on large firms stock prices

8. The Stock Market Crashes
October 29, 1929—Black Tuesday the Stock Market bubble had finally burst
$30 billion lost in the crash
16 million stocks dumped in one day
Prices went spiraling down as people sold their investment
Those who bought on credit had huge debts they couldn’t pay off

9. The Great Depression
the economy plummeted and unemployment skyrocketed
Stock market crash caused people to panic and with draw all of their money from the banks
banks collapse
,000 of the 25,000 banks have failed
90,000 businesses went bankrupt
Unemployment jumps from 3% to 25%

10. Global Effects
The U.S. was not the only country to face depression– many European nations faced the same struggles with the postwar economies
Hawley-Smooth Tariff Act: established to protect farmers and manufactures from foreign competition– does the opposite by restricting the flow of goods