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Download Ch_ 22_ sec_1 - Pequannock Township High School
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Chapter 22 Section 1 • http://www.youtube.com/watch?v=GCQfMWAikyU • I-ndustry • F-arming • C-onsumers • I-ncome • C-redit Industry Some industries were less competitive • Railroads • Textiles • Steel • Energy • Housing Farmers produced more than they could sell • After WWI crop prices decline 40% • Between 1919-1921 annual income went from 10 billion to 4 billion • Farmers had taken loans- Equipment/Land • Farmers can’t pay • Bank Auction • Banks begin to fail • McNary-Haugen Bill • Federal Price Supports • Gov. will buy up surplus of agricultural goods sell them at a loss. • Coolidge vetoed the bill twice • Farmers: No longer can buy goods • Late 1920’s: rising prices, stagnant wages, unbalanced distribution of income, and overbuying on credit. • Widening gap between rich and poor. • The rich got richer while the poor got poorer • Wealth of the 1% rose 75 % • The rest only 9% • 70% of American Families only made 2,500 a year • Basics for a comfortable living • Pretty on the outside. Problems building up • People cannot afford the new goods of the time. • Many people went into debt buying goods on the installment plan • People living beyond their means • Stop spending The Election of 1928 Democrats Republicans Alfred E. Smith Herbert Hoover Governor of New York Sec. of Commerce Witty / Outgoing Formal / Reserved Americans trusted the Republicans to continue prosperity Many Americans practiced speculation & buying on margin Speculation – buying of stocks/bonds, possible profit, very risky Buying on margin – only paying for part of the stock • Companies worth is inflated • Government did not discourage the high risks • People were blinded by false hope of prosperity of the 1920’s • October 24, 1929 • Black Thursday • Stock prices dropped • Cause panic • October 29, 1929 • Black Tuesday • Shareholders sell stocks • Millions can’t find buyers, stuck huge debt • Many Americans lost EVERYTHING in the crash • By mid-November 30 Billion lost • Equal amount spent for WWI • Americans panicked and tried to withdraw their money from the bank • The banks ran out of money and closed • People lost their savings • Period between 1929-1940 in which the economy plummeted and unemployment skyrocketed. • Total collapse of the economy • People try to withdraw money from Banks • Banks had invested most money in Stock Market • In 1929 600 banks close • By 1933 11,000 of the 25,000 banks had closed • Government did not protect or insure bank accounts • Loss of entire savings • 1929-1932: GDP= 104 Billion- 59 Billion • 90,000 businesses went bankrupt • 1 out of every 4 people were unemployed • People who kept their jobs had cut hours and less wages • Highest tariff in US History • Designed to protect farmers and manufacturers from foreign competition • Opposite effect: other countries cant buy American goods. • http://www.youtube.com/watch?v=ccNilnpvbJg
