1. The Economy in the Late 1920s Ch. 14 sec. 3
*1928—Herbert Hoover wins presidential election
--Rep., self-made millionaire
--Stock mrkt. is doing GREAT when he is elected
*Welfare capitalism---new type of approach to workers’ demands---prevent strikes & keep productivity high
--raised wages, paid vacations, health plans, recreation programs & English classes.
**meant to strengthen company loyalty and morale

2. *Economic Danger Signs---
-Only the rich were really getting richer
-1929—0.1 % had incomes of < $100,000 & controlled 34% of the country’s total savings
-Americans were buying EVERYTHING on credit! Ran up huge debts
-People playing the stock market---buying on margin---purchase stock for only a fraction of its price---borrow the rest
-Rising productivity but NO DEMAND!!!!! Warehouses were overstocked, overproduction = slowdown (e.g. cars)…..other industries suffer, like glass, rubber, steel…..
--falling farm prices---- farms could not pay loans…banks could not get $$ from farms…banks failed….
*factory workers = still worked very long hours w/ low wages and the BOSSES got RICHER!!!!!

3. *Speculation---practice of making high-risk investments in hopes of getting a huge return….
--Only WEALTHY people played the stock market before WWI……now….ordinary people were making fortunes on stock market…….almost everybody started playing the market.
*uneven wealth, rising debt, stock speculation, overproduction, and the hardships of farmers and workers signaled trouble looming on the horizon…….some blamed Republican Presidential policies….