• Flip to the blank side of your handout• Analyze the painting quietly• “spill” words & thoughts that come to YOUR mind onto the card

Word Spill

“Employment Agency” Isaac Soyer

• A decade of overspending led to a sudden CRASH of the economy• Thousands in cities were out of jobs

• People became desperate & discouraged

Taking a step back…1928 election:

• We now know that the U.S. associated “prosperity” with “Republican president”

• Coolidge chose not to run• Hoover (R) wins by a landslide• Hoover had previously been Sec. of Commerce, thus

aiding in that prosperity

“We in America are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is

vanishing among us.” – Herbert Hoover 1928

Blinders???

President Hoover

• Aimed for following in Cal’s footsteps• 7 months after he’s president the stock market crashes• Worst economic depression in history!

Recapping Signs of Trouble• People were blinded by

wealth & prosperity • The rich didn’t see trouble

coming• Some Americans had not

shared in the prosperity of the 20s (they saw it coming)

• Textiles & mining were industries that lost many jobs during the 20s

PA mining town tombstone reads: “For 40 years beneath the sod, with pick & spade I did my task.

The coal king’s slave, but now, thank God, I’m free at last”

Farmers suffered during the 20sFarm expenses had risen much faster than the prices that

farmers received or their products

• Farmers did NOT reduce production (it was their living!)

• Result: prices for farm products stayed low & income fell

• Downward spiral = no power to buy goods or pay off loans

The crash is coming!August 1929 – many investors worried that the

boom might soon “run out” or end

ON YOUR STICKIE WRITE DOWN…

Something you would

DEFINITELY want to

spend $$ on

Something you would

NEVER want to spend $$

on

Investor fear grows…

• They began selling their stocks• By September this paranoia caught on & many more sold stocks• The volume of selling caused the prices of each stock to fall• Result: selling continued, stock prices tumbled

DEMAND

SUPPLY

THINK…. What’s

something you love? You hate?

Many investors had bought stocks on margin • Buyers of stocks on margin can pay only part of the

cost of the stock when they make the purchase if they don’t have a lot of $$

• They can borrow the rest from stockbrokers

Stockbrokers: invest in the stock market for individuals or corporations

• With prices falling, brokers asked investors to pay back what they owed

• Investors who could not repay their loans had to sell their stock

• Panic quickly set in

Oct 24-Oct 29People tried to unload millions of shares, resulting in

stock prices dropping even further

• Oct 29: Black Tuesday – when the market opened, a wild stampede of selling hit the NYSE

• Prices plunged as there were no buyers• People who thought they owned valuable stocks

were left with worthless paper• Result: business leaders tried to restore confidence in the

economy, but it was no use