The Great Crash Is it easy or hard to borrow money in the 1920’s? It is easy because businesses like steel, automobiles, and manufacturing are doing well.
Optimism- Believing that everything is going to work out well. Speculating- Making an investment that is risky but might bring big earnings.
Stock- The shares of a particular company or corporation.
What happens when people over speculated on stocks? When people borrowed money they couldn’t repay the whole system collapsed.
2/3 face value = .66 for every $1.00 Instead of cash, how were stocks purchased in the 1920’s? Banks let people borrow more money than was actually in circulation. 2/3 face value = .66 for every $1.00
A “Black” Day October 24, 1929- Black Thursday- Stocks took a large plunge and people decided to sell. Stocks are only worth money if people want them!!
How did “panic” play in the events of Black Thursday? As news spread of the free fall everyone tried to sell their shares.
When Banks go broke!! October 29, 1929- Black Tuesday Why do many banks have to close after the crash? Because they had no money to give to people.
The federal reserve What is the job of the Federal Reserve? To safeguard the economy. To stop recessions/depressions. What could the Federal Reserve have done to stop the depression? Stop loaning money.
The Federal Reserve underestimated the problem. They kept lending money and did not help small banks, many of which closed.
Unemployment With the crash of the stock market a large number of ___________ and ________ failed. With the crash of the stock market a large number of businesses and banks failed.
By 1932 ___% of the nation was unemployed. America’s _____ were among the hardest hit. America’s farmer’s were among the hardest hit.
Dust bowl On top of everything else a draught struck the heartland. Draught- a period of time without rain. Without any rain the ground dried up and wind blew dust everywhere!!!
A worldwide failure High ______ were imposed to keep people from spending money of foreign products. High tariffs were imposed to keep people from spending money on foreign products. Tariff- a tax on imported goods.
The New deal “The only thing we have to fear is fear itself” The name of FDR’s sweeping changes. The New Deal- within months new government programs were in designed to get people back to work.
5 major cornerstones of the new deal Social Security- pay a little money every paycheck for your retirement at 65. Farm assistance program- price support for crops and low-interest loans to buy farms.
5 Major cornerstones of the New deal Federal work programs- giving people jobs building bridges, dams, roads, etc. Labor Rights- set a national minimum wage, allowed for unions to be formed.
5 Major cornerstones of the New deal Environmental improvement- new infrastructures and conservation programs change the landscape.
Relief, recovery, reform The three big ideas behind Roosevelt’s New Deal? Offering help Rebuilding America Making sure a depression never happens again.
Up Next World War II !!!