1. Stock Market Crash
Mr. Williams

2. What was life like for many Americans during the 1920s?
How did they achieve this lifestyle?

3. Prosperity of the 1920s
Gross National Product (GNP)
Total value of goods and services produced in a nation during a specific period
Rose by 30% during the 1920s

4. Income Disparity
Highest paid 5% of workers received 70% of country’s income in 1929
Remaining 95% combined received only 30%

5. Stock Market
Stock is ownership in a company and it is sold in numbers of shares
Buy share: own piece of a corporation
Value depends on how well the corporation is doing

6. Overall value of the stock market increased nearly 400% during the 1920s
Many Americans invested (put money into stocks, land, etc.) in the hopes that this would lead to more money for them

7. Number of shares being traded rose from 318 million in 1920 to 1 billion in 1929
“If a man saves $15 a week and invests in good common stocks…at the end of 20 years he will have at least $80,000…$400 a month. He will be rich.” -John J. Raskob 1929

8. Credit and Market Buying on margin
Borrow $ from a stockbroker to cover the difference paid for a share on the market
Example: share cost $1,000 but investor only pays $500 now and the rest when the stock was sold

10. Black Tuesday
October 29,1929
Investors sold more than 16 million shares as a result of others selling and prices falling
In October stocks dropped in value by $16 billion

13. What led to the Stock Market Crashing?
Why could the attitudes of the 20s be responsible for this?

15. Financial Causes of the Crash
Stock markets rise in 20s
Speculation in stock increases
Margin buying encouraged by Federal Reserve policies
Stock prices rise to unrealistic levels

17. Effects on Banks Peopled rushed to banks to withdraw their money
Some banks had invested this money on stock market
More than 5,000 banks went out of business

18. Federal Reserve System
Nation’s central bank
Takes actions and sets policies to regulate nation’s money supply to promote healthy economic activity
Enforced policies to make it harder for brokers to give out credit

19. Effects on Business Banks unwilling to lend businesses money
Consumers cut back on their spending
Companies had to lay off workers and these unemployed workers had no $

20. Effects Overseas American banks called in loans
NO $ or demand for their product, foreign countries also laid off workers
Also, governments from many countries passed high tariffs

21. Effect on Farming
Widespread joblessness and poverty reduced American’s ability to buy food
Farmers produced more food than they sold and prices went down: 1933 prices half of what they were in 1929

22. As incomes dropped, many farmers were unable to make payments on their loans
Foreclosure: When a bank or other lender takes over ownership of a property from an owner who has failed to make loan payments

24. Dust Bowl 1931 a drought occurred in the Great plains
Period of below-average rainfall which lasted years
This coupled with severe dust storms destroyed crops

25. By end of 1930s about 2.5 million people left Great Plains
Many headed west along Route 66 to California to look for work on farms and orchards
Okies-migrants who went to California

32. Hobos and Hoovervilles
Communities of sprawling neighborhoods of shacks sprang up on the outskirts of towns or in public parks
Hoboes hopped trains to travel from town to town looking for work