1. 22.1: The Nation’s Sick Economy OBJECTIVE: Understand the causes of the Great Depression

2. QUIZ 1.Who ran for the presidency for the democrats in 1928? 2.Who won the election of 1928? 3.What was “Black Tuesday”? 4.A “barometer of the Stock Market’s Performance is the ___________ Average. 5.Making a small down payment for a stock and borrowing the rest is called__________

3. BEGINNING OF THE GREAT DEPRESSION CAUSESACTIONS IN RESPONSE 1.Old and decaying industrial base 2.A crisis in the farm sector 3.The availability of instant credit 4.An unequal distribution of income 5.STOCK MARKET CRASH Hawley –Smoot Tariff VETO PRICE SUPPORTS Buying on margin

4. Economic Troubles Brewing Big industries (steel, textiles, railroads) not making profits Diminishing demand for new products and new construction Agricultural business withering Congress passes price supports for farmers Pres. Coolidge vetoes price supports twice, 1927 & 1928 HOW ARE THESE BUSINESS CHANGES RELATED TO WWI?

5. THE MASS- CONSUMPTION ECONOMY =BAD HABITS

6. CONSUMER’S BAD HABITS Americans are buying less. Why? Business are producing more. Why? Americans use credit more. Why? OUTCOME: The gap between rich and poor was rapidly spreading. FACT: In 1929 5% of US controlled nearly a third of its wealth, while 40% of US only has 10% of its wealth.

7. http://www.commondreams.org/headlines04/images/0817-01.jpg

8. ELECTION OF 1928 CANDIDATES: Al Smith runs for Democrats Herbert Hoover runs for Republicans ISSUES: Smith’s Catholicism, opposition to prohibition, and connections to NYC VERSUS the apparent prosperity under Republicans OUTCOME: Hoover wins handily.

9. http://fisher.lib.virginia.edu/collections/stats/elections/maps/1928.gif

10. STOCK MARKET CRASH CAUSES Buying on margin Speculation EFFECTS Black Tuesday (10/29/29) Run on banks Great Depression

11. http://www.ambrosevideo.com/resources/docs/56.JPG

12. BEGINNING OF THE GREAT DEPRESSION CAUSESACTIONS IN RESPONSE 1.Old and decaying industrial base 2.A crisis in the farm sector 3.The availability of instant credit 4.An unequal distribution of income 5.STOCK MARKET CRASH Hawley –Smoot Tariff VETO PRICE SUPPORTS Buying on margin

13. BEGINNING OF THE GREAT DEPRESSION EFFECTS Falling demand for consumer goods Gross Nat. Product cut in half!!! Unemployment rises to 25%!!! Interests rates fall, people borrow $ and fall into deeper debt Collapse of investment and banks Global Depression

14. Unemployment, in millions 15 12 9 6 3 0 1928 1929 1930 1931 1932 1933

15. Bank Failures, in thousands 543210543210 1928 1929 1930 1931 1932 1933

16. Business Failures, in thousands 35 30 25 20 15 1928 1929 1930 1931 1932 1933

17. STOCK MARKET CRASH