14 sec.1

Nation’s Sick Economy

Economic Troubles

• Housing boom faded• Railroads lost business• Mining & lumbering suffered

Farmers Suffer

• During WWI farmers flourished• After War, crop prices fell 50%

Consumers Spend less

• Farmers bought less because they had less money

• Spinoff effect

Living on Credit

• Many Consumers bought now and paid later - buying things on credit

Credit

Uneven Distribution of Wealth

• Half of Americans lived below poverty line

• Richest 1% saw incomes rise 75% in 20’s.

Election of 1928

• Hoover beats Al Smith• Smith lost because Catholic, heavy New York accent

Herbert Hoover

Stock Market

• Buying on Margin - when purchaser of stocks made a down payment and bought the rest on credit

• As stocks made money, investors paid off loan

Black Tuesday

• Prices for stocks fell dramatically

• Everyone tried to sell their stocks

• The people who had bought their stocks on credit now owed more money than they could pay

• Others lost life saving • October 29th, 1929

Black Tuesday

Causes of Great Depression

• 1. Farm Crisis• 2. Buying on Credit• 3. Unequal distribution of wealth - normal people could not consume products

Effects of Great Depression

• Unemployment rose from 3% to 25%

• Other workers accepted pay cuts

• 6,000 banks fail• Depression spreads worldwide

Notequiz 1

• 1. Why did farmers flourish during WWI?• 2. Who won the election of 1928?• 3. Which Catholic ran for the Democrats?• 4. When did the stock market crash?• 5. What is unequal distribution of wealth?• 6. What was living on credit?• 7. What happened to unemployment from 1929 to 1933?

• 8. What happened to many banks during the depression?

• 9. What was buying on margin in the stock market?

• 10. What happened to rich peoples salaries during the 1920’s?