Approaching Depression
Republican domestic and international economic policies 1 Republican domestic and international economic policies
Unchecked stock speculation 2 Unchecked stock speculation
Weak and unregulated banking institutions 3 Weak and unregulated banking institutions
Overproduction of goods 4 Overproduction of goods
The decline of the farming industry 5 The decline of the farming industry
Unequal distribution of wealth 6 Unequal distribution of wealth
The Postwar Economic Boom 20’s Economic boom leads to overproduction and over-consumption #’s of poor increased (farmers, factory workers) - they couldn’t afford high number of luxury goods being produced.
Contin. Stock market crashes but isn’t only reason for depression…
Republican Economic Policies “The business of America is business.” Coolidge and his staff support ‘trickle-down economics’ produces a widening gap b/t rich and poor.
cont… International $ problems we loaned Britain and France huge sums of $ that they couldn’t pay back.
Real Estate and Stock Speculation Speculation = risky investment hoping to make large profit - widespread in 1920’s. real-estate in CA and Fl “promised beach-front property” scams.
cont. Unchecked stock market speculation as real-estate market goes under, people turn to stock market. Unethical practices were not regulated by gov.
The Crash of the Market and Banking Industry Downward spiral of stock prices…SELL, SELL, SELL! “Black Tuesday” results in American business losses of $16 Billion!
cont. Laissez faire attitude brings banks to their knees (and their debtors) banks invested too - w/ other people’s money - and lost! (one-fourth of the nation’s banks closed!)
Overproduction Since people were willing to buy lots of stuff, lots of stuff was being produced = basic supply and demand.
Mechanized factories produced more industrial goods than ever Farmers produced more and more even though Europe no longer needed their crops.
The Toll on the Farming Industry Backbone of American Economy banks foreclosed, farmers lost, people moved The Dust Bowl People lived in squalor - shanty towns, famine, no medicine
Unequal Distribution of Wealth Huge gap between rich and poor 60% of Amer. lived at poverty level. 1% of Amer. owned more than half of the country’s wealth. “Trickle-down” didn’t work
Industrial worker and farmer alike replaced by machines. No more purchasing power - Everyone was stuck!