1. The Bubble Bursts Chapter 23 Part 1
The Great Depression
The Bubble Bursts
Chapter 23 Part 1

2. American Business (Side Note)
Business flourishing.
Business doing well = higher stock prices
Stock prices rising = less buyers
Less buyers = less business
Less business = need to lower stock prices
Lower stock prices = more buyers
Problem: Stock brokers (representatives of a company who buy/sell stocks) sold more shares than purchased new ones. Goal is to buy/sell (effectively trade) less valuable stocks for stocks that are going to become more valuable.

3. DOOM!
_____________________: Record breaking 13 million shares exchanged.
Prices slid so low that investors lost $9 billion dollars.
Day nicknamed “___________”.

4. DOOM!
Panic broke out.
Fortunes made over the previous decades vanished in minutes.
Prices continued to ____ until they bottomed out on Nov. 13th.
The stock market had ________.

5. DOOM!
Stock market crash began what we now label the _____ ____________.

6. Problems Businesses now _______ pay, workers, etc.
People/businesses continued to buy on ______. (They had no money.)
People had invested in “future profit” of land investments.
_____ = biggest boom area
1926: _______ -- effectively ended all investments/repayments.

7. Problems Investors bought stocks for short-term profit.
Brokers bought stock on credit – called “___ _______________”
Investors paid part of purchase price (usually 10%) in cash; borrowed rest from brokers and used that stock as collateral.

8. PANIC!
Widespread unemployment  caused widespread defaulting on loans  caused widespread bank failures.
People began to panic – this caused __________________.

9. The Run on Banks (Side Note)
People afraid they might lose the money they had in the banks.
Some people withdrew all their money to pay back loans/brokers.
Some simply withdrew all their money to guarantee they would have money.
Banks could not keep up with demand; shut their doors and closed down.

10. Unemployment Many families now unable to pay _______________.
Some moved to abandoned boxcars or built ______ on the edge of town.
_______________ blamed for mess.
People nicknamed the little shanty towns (groups of shacks) that popped up outside of cities “________________”.

11. Farming Problems Farmers ___________ cattle pre-WWI.
WWI: Plains plowed into __________ for food production.
Now, land over used, dried up, and soil infertile.
Winds began to blow and kick up dust.
Area named “__________”.

14. Hoover to the Rescue?
Hoover tried to keep optimistic but few listened.
Because Hoover was president, he was blamed for the creation of the problems – even though it was due to decades of excessive spending and poor financial choices. (It was ____ his fault.)

15. Veterans Demand Aid
Veterans of WWI promised _______________ to be paid in 1945.
Wanted ______________.
WWI vets traveled to D.C. and protested.
Called themselves the “_______________”.
Lost the campaign, but Hoover did authorize an early payment large enough to pay for their return trip home.

16. Hoover’s Theory
Hoover believed in local responsibility for giving aid to the needy.
Hoover believed that when government money was given to people, it should not be a _____ or a direct handout.
Have people work for it – helps with unemployment while at the same time providing financial assistance.

17. Major Government Agency
January 1932: Congress passes bill by Hoover to create a new agency.
This agency was called the _____________ _________________________.
The method of dealing with the Depression was a _____ idea, but it did not ___ in the end.
Problem: Spent too much ___ to help and overspent $$ the government really ______ ______________________________.