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

“Employment Agency” “Employment Agency” Isaac Soyer CRASH 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 20s Farm expenses had risen much faster than the prices that farmers received or their products Farmers did NOT reduce production (it was their living!) Farmers did NOT reduce production (it was their living!) Result: prices for farm products stayed low & income fell Result: prices for farm products stayed low & income fell Downward spiral = no power to buy goods or pay off loans 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 29 People 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 Oct 29: Black Tuesday – when the market opened, a wild stampede of selling hit the NYSE Prices plunged as there were no buyers Prices plunged as there were no buyers People who thought they owned valuable stocks were left with worthless paper 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 Result: business leaders tried to restore confidence in the economy, but it was no use