1. The Great Depression Begins
Chapter 14-1

2. Economic Troubles on the Horizon
As the 1920’s progressed serious problems began to appear on the economic front
Many could not earn a decent living, many businesses began to struggle, & farmers produced a surplus of crops & livestock causing prices to hit bottom

3. Industries in Trouble
The prosperity of the ‘20’s marked the cracks that began to show by the end of the decade
Key industries such as the steel industry & railroads barley showed a profit
Mining & lumbering industries that had prospered during the war years now severely struggled
Coal mining was particularly hit as new forms of energy were developed
Perhaps the most important indicator was the fate of the housing industry which new builds would take a drastic fall

4. Farmers Need a Lift
Farmers took a huge hit as prices would fall to their lowest levels in decades
During the war farmers were able to sell their crops to the government as well as waring nations
Also during the war new technology & farming practices increased production to all time levels
In order to keep up with demand farmers took out loans for equipment, seed, etc.
When the demand dropped & prices fell farmers were left with debt & no way to meet their obligations causing many to lose their farms
Congress tried to pass legislation to buy surplus farm products, but it was vetoed by President Coolidge, twice

5. Consumers Have Less Money To Spend
By the late 1920’s Americans were buying less goods mainly due to rising prices & stagnant wages
There was also an unbalanced distribution of wealth as a minority of Americans held the majority of wealth which led to many buying goods on credit

6. Living on Credit
Although many Americans appeared to be prosperous during the ‘20’s many were living beyond their means as they were living on credit
Many bought goods & agreed to pay later
When the economy took the downturn many were unable to meet their obligations
Unable to meet the debt that they already had many Americans were forced to cut back on new purchases

7. Uneven Distribution of Income
During the 1920’s the wealthiest Americans wealth rose by 75% while the rest of Americas wealth rose by a mere 9%
More than 75% of Americas families earned les than $2,500 which was considered the minimum for a decent living
Approximately only 50% of American homes had electricity or heat
Most Americans did not have the means to participate in the economic boom of the ‘20’s & were left behind

8. Hoover Takes Over A Nation
The 1928 election would pit the Democratic candidate Alfred Smith versus the Republican candidate Herbert Hoover
Hoover had never run for public office while Smith was a career politician
Hoover would count on one major point, the prosperity of the ‘20’s under Republican guidance
In the end Hoover achieved an overwhelming victory

9. Dreams of Riches in the Stock Market
By 1929 economists had begun to warn of an impending disaster
Most Americans however were unphased by the warnings
The stock market had become the single most visible symbol of American prosperity
Throughout the ‘20’s the Dow Jones Industrial Average, the most widely used barometer, had steadily rose
This Bull Market, a period of rising stock prices, seamed to have an endless ceiling
Many Americans began to speculate or buy stocks at inflated prices with the hopes they would rise even higher
Many of the stock purchases were on the margin or buy now & pay later when the value had risen
This caused an increase in the value of the stocks but was not a true value of the companies
When the price of stocks began to fall many could not meet the margin call & would lose everything

10. The Stock Market Crashes
In early September 1929 stock prices peaked & the fell
Confidence in the market was shaken as investors began to panic selling their shares
On October 24 the market took another plunge & investors again began to unload their investments
The next day, known as Black Tuesday, investors attempted to get what they could for their stocks before prices fell any further
The market had crashed & millions of Americans had lost everything
Crowd gathering on Wall Street after the 1929 crash.

11. Financial Collapse
The market crash would signal the beginning of the Great Depression
This would last from
The crash did not cause the depression, but it did hastened it & make it more severe

12. Bank & Business Failures
After the crash many began withdrawing savings from the banks
The issue was that many could not get their money as the banks had invested in the stock market & did not have the cash, it was lost…..
As a result many banks were forced to close while those who had savings in those institutions were left with nothing
By ,000 of the nations 25,000 banks had closed
In the business world the GNP or Gross national Product, the nations total amount of goods & services, was cut in half resulting in layoffs for millions of Americans

13. Worldwide Shock Waves
The United States was not the only country gripped by the depression as it was also felt around the world
Many nations especially in Europe were still trying to recover from WWI
The depression made the problems worse as Americans could no longer afford to by imported goods & other nations could no longer afford to buy American products & farm goods
In 1930 Congress attempted to protect American goods by enacting the Hawley-Smoot Tariff which raised tariffs on all incoming goods
This would backfire as other nations enacted similar tariffs reducing the amount of goods that could be exported to those nations
Within a few short years trade had fallen 40%

14. Causes of the Great Depression
Many differ on the exact causes of the depression but they do share in a common set of factors
Policies that cut down the market for goods
Farm prices bottomed
Availability of easy credit
Unequal distribution of wealth

15. Causes of the Great Depression
As newly mechanized factories were cranking out goods at a record pace & demand was falling coupled with tariffs that would limit markets the American economy was doomed
Add failing banks, easy credit, & a sick stock market Americans would have to endure a period of despair the likes that have never been seen