Ch 14 Sec 1 The Nations Sick Economy Rising Wealth A Booming Stock Market A False Sense of faith in the economy.

Slides:



Advertisements
Similar presentations
Election of 1928 Hebert Hoover wins in a landslide.
Advertisements

The Great Depression Depression
The Economy in the late 1920s Angela Brown Chapter 22 Section 1.
The Great Depression and New Deal (1929 – 1941)
The Stock Market Crash of 1929 and the beginning of the Great Depression.
INDUSTRY KEY INDUSTRIES BARELY MADE A PROFIT SOME INDUSTRIES LOST BUSINESS TO FOREIGN COMPETITION & NEW AMERICAN TECHNOLOGIES SOME INDUSTRIES SUFFERED.
Ch. 14 Sec. 1 The Nation’s Sick Economy
The stock Market Crash of s Booming Economy Wages up 40% after WWI Stock Market was soaring Many people investing – get rich quick schemes 1920s.
1. How did the Construction of the Panama Canal influence world trade? A. The canal made Panama the center of world trade. B. The canal slowed world trade.
The Economy in the Late 1920's Mr. Chick U.S. History.
1920’s “Crash and Depression” “The Great Depression Begins”
PROSPERITY TO THE CRASH. Goals for today  Understand the major causes and effects of the stock market crash and the Great Depression.
ECONOMIC PROBLEMS OF THE 1920s 1. Overproduction.  Industry produced more than people bought.
The Economy in the Late 1920s
The Great Depression The Crash & It’s Causes. The CRASH Thursday, October 24, 1929 sell, Sell, SELL! Five leading NY bankers meet at noon, secretly pump.
EQ: WHAT ECONOMIC PROBLEMS THREATENED THE BOOM OF THE 1920S? The Economy of the 1920s.
The Nation’s Sick Economy
The Great Depression. “Brother Can You Spare A Dime” –By Bing Crosby –Performed By Al Jolsen How did the working class Americans feel about the “hard.
 1920's had been a period of good economic times  Tuesday, Oct. 29th, NYC Stock market crashed, causing a depression that would last years.
Crash and Depression Chapter 22.
Causes of Great Depression Chapter 22. Economy in the 1920s: Booming Economy  WWI brought US out of recession  Americans generally optimistic  1925—stock.
The Economy in the Late 1920s CHAPTER 14 SECTION 3
The Great Depression The Economy in the Late 1920’s.
14 sec.1 Nation’s Sick Economy. Economic Troubles Housing boom faded Railroads lost business Mining & lumbering suffered.
Business Boom & The Economy in the Late 1920s
Late 1920s Economy “Wonderful Prosperity” Stock market value keeps increasingStock market value keeps increasing –1925 = $27 billion –1929 = $87.
The Great Depression and New Deal (1929 – 1941) The Causes of the Depression and the Great Crash.
The Nation’s Sick Economy. Industries in Trouble Key industries barely making a profit Mining and lumbering faced diminished demands Key industries barely.
(top left side) Opener: What would happen if you spent more money than you actually had?
Warm Up ISN, pg. 65 What do you think is the most important issue facing the president today and why?
False Sense of Prosperity Mood of America optimistic about future Medical advances = life expectancy up 10 years Infant mortality down Standard of living.
Economy of the 1920s Chapter 14.2, 14.3 Signs of Prosperity Signs of Problems.
Period 1, 5, & 6  We will examine the causes of the Great Depression  Go over video questions  Chapter 14.1 Notes  Quiz  Chapter 14.2 Reading.
Economic Troubles on the Horizon Things Aren’t as Good as They Appear to Be!
ECONOMIC PROBLEMS OF THE 1920s Overproduction. Overproduction. –Industry produced more than people bought. Declining demand for products. Declining demand.
The Nation’s Sick Economy What caused the economy to go bad at the end of the 1920s?
The Economy in the Late 1920s. Essential Question How did the government’s policies and economic problems of the 1920s contribute to the collapse of the.
Economics in the 1920s From Boom to Bust.
The Nation’s Sick Economy The Great Depression (The Hoover Years):
The Roaring 20’s The Economy of the 1920’s. A Consumer Economy Defined as: One that depends on a large amount of spending by consumers Buying on Credit.
The Nation’s Economy (Ch. 14, Sec. 1) 1. Industries Struggle As Demand Drops 2. Credit Leads to Financial Crisis 3. Financial Collapse Follows Stock Market.
The Economy of the 1920’s Chapter 14, Section 3. Setting the Scene: What were three reasons Americans were optimistic in the early 1920’s? 1.Medical advances.
The Nation’s Sick Economy What caused the economy to go bad at the end of the 1920s?
The Great Depression. What was the Great Depression? Time of economic crisis characterized by high unemployment during the 1930s, the beginning is marked.
Causes of the Great Depression. Possible Causes of the Great Depression Stock Market Crash Over production Unequal distribution of wealth Consumerist.
22-1: The Nation’s Sick Economy. Industry Key industries barely made a profit Some industries lost business to foreign competition and new American technologies.
The Economy in the Late 1920’s. As you enter the room… Pick up the worksheet and answer the bell ringer question: What factors contributed to the booming.
Aim #63: What were the causes of the Great Depression? Do now! On a separate sheet of paper, explain what you believe was the most significant cause of.
Warm-ups During the 1920’s, many investors borrowed money from banks in order to speculate in the stock market. This practice was often a bad idea for.
Europe in 20s trying to recover from war War Debt GermanyFrance Great BritainUnited States Difficult for U.S. companies to sell products to Europe Tariff:
THE GREAT DEPRESSION The Nation’s Sick Economy. The future’s so Bright, I gotta wear shades? 1920’s were a prosperous decade to many, but not all. Trouble.
The Economy in the Late 1920s The Streets are Paved with Gold.
Causes of the Great Depression Causes of the Depression 1. During WWI, Farmers purchased more land and machinery, but after the war... Farmers.
Roots of the Great Depression
The Coming of the Crash How did it all go wrong?.
Warm Up # 32 Describe what buying on margin is and why it can be so dangerous.
The Great Depression Causes Review.
The Economy in the late 1920s
The Great Depression
THE GREAT DEPRESSION BEGINS
The Coming of the Crash How did it all go wrong?.
Warm-up: The Great Depression section 2
The Economy in the Late 1920s Ch. 14 sec. 3
The Economy in the late 1920s
The Nations Sick Economy
The Economy of the 1920’s Chapter 14, Section 3
The Nation’s Economy Falters
Chapter 22 section 1 and 2 questions
USHC- 6.3a Explain the causes and consequences of the Great Depression, including the disparities in incomes and wealth distribution; the collapse of the.
Presentation transcript:

Ch 14 Sec 1 The Nations Sick Economy Rising Wealth A Booming Stock Market A False Sense of faith in the economy

Essential Questions Why did the economy appear healthy? Why did the economy appear healthy? What danger signs were present in the economy of the late 1920’s? What danger signs were present in the economy of the late 1920’s?

“Wonderful Prosperity” In 1925 the value of the stock market was $27 billion, by Oct.1929 it was $87 billion. In 1925 the value of the stock market was $27 billion, by Oct.1929 it was $87 billion. Since 1914 workers’ wages rose 40%. Since 1914 workers’ wages rose 40%. Unemployment averaged below 4%. Unemployment averaged below 4%. John J.Raskob “Everybody Ought to be Rich.” $15 per wk, 20yrs.=$400mo John J.Raskob “Everybody Ought to be Rich.” $15 per wk, 20yrs.=$400mo

Welfare Capitalism  Big companies launched strategies to meet workers demands.  They could avoid union intervention, strikes, and keep productivity high. strikes, and keep productivity high.  Employers raised wages, and gave paid vacations, health plans, recreation programs, and even English classes for recent immigrants.  Organized labor lost members in the 1920’s.

Economic Danger Signs Uneven distribution of wealth. Uneven distribution of wealth. 200 large companies controlled 49% of industry. 0.1% controlled 34% of all savings, with incomes over $100, % earned less than $2,500 a year. 80% of families had no savings.

Personal Debt Installment Buying, buying expensive items on credit. Installment Buying, buying expensive items on credit. Radios, Vacuum Cleaners, Kitchen Appliances, Refrigerators, Cars, Tractors and farm equipment. Radios, Vacuum Cleaners, Kitchen Appliances, Refrigerators, Cars, Tractors and farm equipment. People believed future income would cover debt. People believed future income would cover debt.

Playing The Stock Market Americans in the 1920’s had a “Get Rich Quick” attitude. Americans in the 1920’s had a “Get Rich Quick” attitude.

Playing the Market Part II Stock Speculation – High stock prices encouraged Americans to make high- risk investments in hopes of high return. Stock Speculation – High stock prices encouraged Americans to make high- risk investments in hopes of high return. Ordinary Americans now bought stock. Ordinary Americans now bought stock. Buying on Margin- Investors could purchase stock for only a fraction of its price. (10 to 50%) and borrow the rest. Buying on Margin- Investors could purchase stock for only a fraction of its price. (10 to 50%) and borrow the rest. Brokers lent $, and as stocks rose $ could be made and brokers paid off. Brokers lent $, and as stocks rose $ could be made and brokers paid off.

Overproduction of Goods, Too Little Demand By the late 1920’s warehouses were overstocked. By the late 1920’s warehouses were overstocked. There were more good than consumers could buy. There were more good than consumers could buy. Auto industry slumped after Auto industry slumped after Housing Construction fell by 25% between 1928 and Housing Construction fell by 25% between 1928 and 1929.

Trouble For Farmers and Workers About 6,000 About 6,000 Rural Banks failed. Farmers could not pay off machinery and mortgages.

No Help for Farmers and Workers Mc-Nary- Haugen farm relief bill would have given farmers more $ for crops. It was vetoed twice by Pres. Coolidge. Mc-Nary- Haugen farm relief bill would have given farmers more $ for crops. It was vetoed twice by Pres. Coolidge. No Price Supports! No Price Supports! Factory workers, miners and textile workers still worked long hours for little pay especially in rural areas. Factory workers, miners and textile workers still worked long hours for little pay especially in rural areas.

What signaled trouble in 1929? Uneven Distribution of Wealth Uneven Distribution of Wealth Rising Personal Debt Rising Personal Debt Stock Speculation Stock Speculation Overproduction of goods Overproduction of goods Hardships of Farmers and Workers Hardships of Farmers and Workers Laissez-Faire Gov. Econ. Policy Laissez-Faire Gov. Econ. Policy