1. Baltimore Polytechnic Institute February 24, 2011 U.S. History Mr. Green

2. The students will summarize the problems threatening the American economy in the late 1920’s by describing the causes of the stock market crash and of the Great Depression Announcement: Chapter 14 Test Next Thursday Due: African-American project March 4 Drill: Analyze the poster on page 488 and answer the following 1. What economic troubles are suggested by the term “smokeless chimneys” and by the image of the men? 2. Why did the artist include the picture of the mother and children in the poster?

3. Economic Troubles on the Horizon Industries in Trouble Key industries did not make a profit-textiles, steel and railroads, mining, lumbering New home construction fell after 1925 Consumer good industries weakened Question: Why is new home construction an important economic indicator?

4. Farmers need a lift Farmers boomed during WWI Demand declined after WWI and farmers needed to repay debt Farmers grew more in the hopes that more crops would mean more money Farmers defaulted in large numbers and then banks began to fail Congress passed McNary-Haugen bill price supports-government buys crops at a high price then sells them for a low price President Coolidge vetoed it twice in ‘27 and ’28 Question: What were some of the basic difficulties faced by farmers in the 1920’s?

5. Consumers have less money to spend Rising prices Stagnant wages Unbalanced distribution of income Overbuying on credit Living on credit Many Americans living beyond their means Credit became easily available Consumers cut back on spending Uneven distribution of income ½ the nation’s families earned less than $1500/year Income of the wealthiest 1% rose by 75% compared to 9% as a nation

6. A new President Republican-Herbert Hoover Democrat-Alfred E. Smith Hoover won with help from the prosperity of the 1920’s

7. Speculation buying stocks, bonds, or real estate in the hopes of turning a quick profit Buying on Margin borrowing money to buy stocks only worked when stocks went up Black Tuesday October 24, 1920 October 29, 1929-record sell off

8. Students will summarize the causes of the Great Depression on page 487 for a class- work grade

9. 1. Read Chapter 14 Section 2.