The Aftermath of Black Tuesday The Great Depression: The Aftermath of Black Tuesday

In the U.S., the 1920s was a decade of prosperity Bold Cultural Ideas New Inventions available to broad audiences CONFIDENCE in the U.S. economy

How did the U.S. Economy grow so much in the 1920s? Lots of new inventions Automobiles Radios Telephones telegraphs Lots of supply, not enough demand Solution?

FINANCING! 60% of Americans financed automobiles in the 1920s 80% of Americans financed radios in the 1920s Created an artificial demand (people were imagining they had money that they didn’t)

The Stock Market in the 1920s A stock is a percentage of a company. The value of a stock is based on confidence in the market, not the actual profits of the company. The value of stock increased 120% from 1925-1929

The Upward Spiral (or so it seemed….) Americans borrowed money not just to buy goods, but also stocks

Economic Danger Signs of the 1920s Overspeculation on stocks with borrowed money Large gaps between the rich and poor Post-WWI international economic slump Economic Danger Signs of the 1920s

Black Tuesday As rumors spread about inflated stock value, Americans started selling.

What happened to consumers? Consumers were afraid of economic failure, so they stopped spending money. Businesses lost the profit they relied on. Businesses Closed.

What happened to workers? As businesses lost money, salaries were lowered and many workers were laid off or fired. Many businesses couldn’t hire the unemployed because they didn’t have the funds to sustain salaries.

The Downward Spiral (describe) People stopped spending money… Businesses Closed People Lost their jobs People became homeless

What happened to homeowners? As homeowners lost their jobs, they couldn’t afford to pay their mortgages. Banks foreclosed on farms Homeowners became homeless.

On an International Scale… In the 1920s, billions of dollars were loaned to European Allies Allies struggled after WWI and couldn’t repay the money The U.S. increased tariffs to recoup $ (Hawley Smoot Tariff) European countries retaliated with tariffs as well

Bank Closings With so many mortgage foreclosures, banks could not return depositors/ money Banks closed Depositors lost everything

How now would you provide for your family? Many moved west in search of work, after all, farmers will need workers as long as people need to eat! EXCEPT……

The Dust Bowl “The Dust Bowl” Caused by lack of crop rotation and overplowing in the 1930s Drought and wind caused the land to be unfarmable “The Dust Bowl”

Effects of the Dust Bowl Farm foreclosures Food became scarce Dust Pnemonia

The Great Depression People were desperate Americans blamed themselves Suicide rates at an all-time high It seemed there was no end sight.

Is it time for a change? Presidential election of 1932 Herbert Hoover vs. Franklin Delano Roosevelt

The End