American DepressionAmerican Depression

American Economy in the American Economy in the 1920s1920sUnited States was world’s leading

economic power

because of WWI, farms & factories supplied world– fed & supplied Allied soldiers

American Economy in the American Economy in the 1920s1920svalue of stocks skyrocketed around

400%

new products for the common man– automobiles– radios– vacuum cleaners– washers

Hidden ProblemsHidden Problems

wealth distribution– richest 1% of population earned 19% of nation’s

income– top 200 companies held more than 50% of

corporate wealth

credit– borrow money to pay for items and promise to pay

back that money

October 29, 1929October 29, 1929

Black Tuesday– spending slowed– nervous investors sold their stocks

feared stock prices would drop because products were bought as often

Great Depression: severe downturn in American economy following 1929 stock market crash

Outcomes of CrashOutcomes of Crash

investors = ruined

banks = in trouble– loans to ruined investors or companies who saw

decreased spending couldn’t be paid

people = in trouble– money invested in bank wasn’t insured

Investorslost money when stock

market crashed & businesses went bankrupt

Bankslost money when

people/investors & businesses couldn’t repay credit/loans

Businesseslost money when people

bought less goods & investors stopped investing

Peoplelost money when banks closed & when lost jobs

Depression SpreadsDepression Spreads

1933 1 of every 4 workers out of jobs– fewer people could buy food/goods from

market, hurting economy even more

bank failure– lost money when loans went unpaid

no insurance for customers

ADD TO TERMS!!!ADD TO TERMS!!!

add to Section 2 of terms packet

Hoovervilles: collection of huts & shacks as at the edge of a city, housing the unemployed during the 1930s