1. Text Chapter 31.2

2. U.S. production and investment in the 1920s fueled the worlds economy By 1929 American factories produced ½ of the worlds industrial goods.

3. Uneven distribution of wealth (60% of American families earned less than $2K per year). Farm Overproduction: Better production methods and competition from non- U.S. farmers drive crop prices down. Stock Speculation

4. Despite econ. problems, people continued to buy stocks on margin September, 1929Some savvy investors realize stocks are inflated and begin to sell Panic! Market crashes by October, 1929

5. Unemployment rises Production decreases Wages Decline Banks Close (taking investors money with them) Businesses Fail Farmers lose their land

6. Americans demand repayment of European loans Further loans cease Congress places tariffs on European goods, so demand for them declines. Other nations respond by raising tariffs World trade drops 65%