Presentation is loading. Please wait.

Presentation is loading. Please wait.

 1920's had been a period of good economic times  Tuesday, Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last years.

Similar presentations


Presentation on theme: " 1920's had been a period of good economic times  Tuesday, Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last years."— Presentation transcript:

1  1920's had been a period of good economic times  Tuesday, Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last years

2  Stock Speculation  Unequal Wealth Distribution  Poor Government Policies  Rising Unemployment  Banking Failures  Buying on Credit  Farming Problems

3  #1 Stock Speculation  Public invests in companies by purchasing stocks for profit  Investors could borrow money to buy stock. This was known as BUYING ON MARGIN.  Buying on the margin encouraged STOCK SPECULATION (Buying and selling stocks quickly to make a profit)

4  Stock value increased but didn’t necessarily reflect the true picture of the company (overinflated)  Unscrupulous traders would buy and sell shares intentionally to inflate a given company’s stock value  This gave a false sense of security/confidence in the American market

5  Farmers were going bankrupt because of over investing  Unemployment rose with little or no government assistance  People were not buying goods so less was produced-so less jobs available.  Electricity was used and production methods improved- less people were needed Unemployment More consumer goods were available, but there weren't necessarily more people to buy them (Overproduction)

6  #3 Uneven distribution of wealth  1% at top owned 25% of the wealth  The middle class depended on their salaries and when productivity declined they lost their jobs  Because of low savings, they had to cut back on their purchases  This decline in consumption among the middle class caused major problems in the economy

7  #4 Poor Government Policies  President Hoover didn't believe that the government should play an active role in the economy and in helping out the people  He believed in “Laissez Faire” government “hands off” big business  So there were little or no regulations on business and the stock market  Hoover also organized some private relief agencies for the unemployed  Hoover lowered the taxes of the wealthy

8 HHoover was increasingly unpopular, but he continued to try. He persuaded Congress to establish the RECONSTRUCTION FINANCE CORPORATION which had power to make emergency loans to banks TToo little too late… HHoover wouldn't involve himself in any programs of direct governmental aid to individuals -didn't want to erode Americans sense of "RUGGED INDIVIDUALISM"

9  During and after WWI the farmers had high production of food  Times were good so they went in debt to expand and buy land  World wide Food Surplus happened as a result of Europe started to produce crops and the US had too many  Food Demand dropped, farmers went bankrupt and their banks closed down.

10  Americans were buying on credit and taking out loans.  Cars, stock, household appliances.  Many did not have money to back up purchases.

11  #7 Banking Failures  On October 29,1929 investors’ confidence dropped, leading to a market collapse  Investors tried to sell all at once and bottom fell out of market = panic selling  Lead to the failure of banks.  Because of the booming 1920's economy, money was plentiful, so banks were quick to make loans to investors and to people who weren’t good risks  People wanted their money-Banks didn’t have the money

12

13


Download ppt " 1920's had been a period of good economic times  Tuesday, Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last years."

Similar presentations


Ads by Google