1. Chapter 22, Sec. 4 The Economy of the 1920’s

2. Industrial Growth From 1922 to 1928, industrial production climbed 70 percent. As more goods came to market, prices dropped. Rising incomes gave consumers more to spend. To encourage spending, businesses offered installment buying. Chain stores and mail-order catalogs made it easier for people to buy goods.

3. Industrial Growth A new consumer culture arose. High tariffs on imports stopped competition with domestic products. Taxes on the wealthy were cut to encourage spending. Americans developed a recklessness about spending.

4. A Booming Stock Market Many people could now afford to purchase stocks, or shares of companies. A bull market occurred, and stocks were so profitable that people began buying on margin. Some economists began to worry, and a few experts warned that the stock market was overvalued, but they were ignored.

5. A Booming Stock Market Most investors ignored the warnings. Most people at the time were not prosperous. The wealthiest Americans made up 5 percent of the population.

6. Signs of Trouble - Farmers Many farmers lived in poverty. Reasons for an agricultural depression: Farmers grew more than the American public could consume. After World War I, other nations were too poor to buy farmers’ surplus crops. Many farmers were unable to pay off their debts.

7. Signs of Trouble - Workers Workers’ wages were rising. Some companies offered benefits such as pensions and paid vacations. Unemployment was high. Unskilled workers who worked on an assembly line were squeezing out skilled workers for less wages.

8. Election of 1928 The Republican Party held the presidency throughout the 1920s. The Republican candidate for the 1928 presidential election: Herbert Hoover The Democratic candidate for the 1928 presidential election: Alfred E. Smith Two issues highlighted in the election: - religion and the economy

9. Election of 1928 Winner: Herbert Hoover Slogan: “a chicken in every pot and a car in every garage”