1. GREAT DEPRESSION

2. Bracing for the Fall  During the 1920’s, U.S. experiences:  Economic growth  Business & industry boom  Prohibition = alcohol is illegal  Renewed focus on isolation from rest of world Post W.W. I  Social progression Women can vote/Women’s rights  Larger personal economic growth…& debt Credit

3. Bracing for the Fall  Herbert Hoover elected in 1928 to help continue prosperity of U.S. from 1920’s.  The success of the ‘20’s masked the fact that U.S. business was in serious trouble: Middle/Low income class wages aren’t raised Can’t afford to purchase new products Unsold products = lost $$ for businesses

4. Bracing for the Fall  The reason for the surplus of products was due to the supply/demand rule. Prices reflect the demand for a product: When demand is high – prices rise to cash in on popularity. (PS4, Xbox One, iPhone 6S, etc.) When demand is low – prices drop to get rid of product. (Clearance, Markdown, “2 for 1”, etc.)

5. Bracing for the Fall  Farmers also face similar hardships: New machinery bought w/ credit helps grow food efficiently Farmers produce more food then can be sold Food prices drop because of surplus/lack of demand Farmers struggle to make $$ to pay off debts (machinery & workers)

6. Bracing for the Fall  Middle/low class Americans have difficulty finding steady work = lack steady income.  Despite lack of steady income, Americans still buy appliances w/ credit. Lack of steady income + buying appliances on credit _______________________________ Americans w/ LARGE credit debts

7. Bracing for the Fall  Despite lack of jobs, the stock market showed the American economy was strong* (* - was a mirage).  Stock market seemed strong because of Americans buying stock on “speculation”. Buy stock in company based on potential If company becomes popular, sell stock at highest $$ (supply/demand)

8. Bracing for the Fall  2 problems with buying on “speculation”:  Biggest risk with buying on “speculation” is when company fails. People lose ALL invested money in stocks if company fails.  Use loaned-out money to buy “speculation” stocks. If company fails, people unable to pay banks money they owed “Speculation” buyers risked bankruptcy Can avoid bankruptcy if there’s a job to pay off debt. Can’t work when no jobs available = no $$ to pay off debt

9. Homework #1 – 11/2/15 1. Explain why middle/low income classes wages NOT being raised was a serious problem. 2. Define/describe what “supply/demand” is. 3. With Americans lacking steady income, what did they often use to purchase something? 4. What were 2 problems with buying stock on “speculation”? 5. What was the risk people were taking by purchasing stock on “speculation”?

10. Black Tuesday  With most stocks being bought with “speculation”, stock market reflected a “House of Cards”.  Through the late 1920’s, stock prices had either maintained their price or risen until 1929.  In late October 1929, prices dropped suddenly causing panic throughout stock market.

11. Black Tuesday  On October 29, 1929 (Black Tuesday), stock prices crashed due to panic selling: Some people began selling stocks to cash in on highest price Others feared missing out on high price; causes massive sell-off Stocks that were once worth thousands became worthless overnight  People who spent life savings on stock market lose everything.

12. Rock Bottom  Stock market crash was first in a series of bad events:  Banks begin closing because they began running out of money  People stop buying goods because they had no $$; sold whatever they could to make some money  Stores go out of business due to lack of sales; fire employees  Unemployment skyrockets as people are desperate to find work

13. Rock Bottom  Because of lack of jobs and money to pay off loans, banks foreclose on houses/properties.  Millions of people become homeless:  Homeless shelters become cramped due to overcrowding  People rely on bread lines for food they couldn’t afford  People create make-shift houses called “Hoovervilles” (Shantytowns)

14. Rock Bottom  With the nation reeling, President Hoover does little to help; wanted to limit the role of the gov’t in the economy.  President Hoover asks churches & charities to help out, but the need was too large for those groups to handle.  American public began to turn on President Hoover, believing he was incapable of fixing the problems  Reason why shantytowns are named Hoovervilles.

15. Rock Bottom  World War I veterans were as affected by stock market crash as anyone.  Were promised war bonus for fighting in WW I.  Bonuses were unpaid before stock market crash – not due until 1940.  In need of money, WWI veterans march on Washington D.C. demanding payment of unpaid bonuses.  President Hoover denies payment; WW I veterans camp out in middle of Washington D.C. until payments are made.

16. Rock Bottom  Angered by the constant nuisance of the soldiers, Hoover orders the U.S. army to remove them from the city.  Army tanks and soldiers forcibly remove soldiers from Washington using:  Tear Gas  Bayonets  Firing shots in air  Photos of the event are captured; Americans are disgusted with Hoover – want him out of office.

17. A New Hope  In 1932, President Hoover is not re-elected; Franklin D. Roosevelt takes over as leader of the U.S.  The first crisis Roosevelt manages is the failing bank system:  Banks closed for 4 days  Only stable banks could re-open w/ gov’t. approval  President Roosevelt used his “fireside chats” as a platform to reassure the nation during this time.  Introduced new policies during these “talks”

18. A New Hope  Roosevelt orders Congress to stay in Washington for his “Hundred Days” legislation; had 3 goals during this time:  Relief for needy  Reform agriculture & industry  Reform economy  Roosevelt unveils his “New Deal” to Congress to fix the U.S.  Congress approves the bills to get nation back on track  Gave relief to those most affected by Depression

19. A New Hope  Some negative reactions to FDR’s New Deal included:  Gov’t was TOO involved in everyday life  No ability for private business to compete (TVA)  Gov’t didn’t do enough to help those in need (Share the Wealth)  American public had chance to voice opinion of FDR’s policies by electing a new Congress…  More Democrats (FDR’s party) elected to Congress instead.

20. A New Hope  Despite criticisms, 2 nd New Deal is passed offering more reforms to the nation.