NOVEMBER 3, 2014

1. New Seating Chart 2. Begin Unit IV: The 1930’s (The Great

Depression and the New Deal)3. 22.1 Notes (part 1)4. 22.1 Vocabulary5. Unit 3 Exam Scores and Magazine

Results: Wednesday!

UNIT IV: THE GREAT DEPRESSION & THE NEW DEAL 1929-1941

Chapters 22 & 23

22.1

Causes of Causes of the Great the Great DepressionDepression

1920’S FARM CRISIS

Before 1920’s: Technological advances in farming allowed farmers to produce more food.

This was great during WWI to feed our population, troops and Allied soldiers.

During WWI many farmers had to borrow money from banks to buy new land, tractors, farm houses, etc.

There was a decrease in demand of American food after WWI.

Led to surplus of food. Farmers then received

lower prices for their crops.

Farming industry experienced serious recession throughout 1920’s…sign of trouble?

PRESIDENTIAL ELECTION OF 1928

Three P’s were major issues in election of 1928.

1. P for Prosperity: Economic success of 1920’s led by Republican Presidents (Harding and Coolidge.)

2. P for Prohibition: Major issue in U.S. throughout 1920’s and in election of 1928 (wet vs. dry)

3. P for Protestantism: Catholic vs. Protestant in 1928.

ELECTION ELECTION OF 1928OF 1928

Republican: Herbert Hoover (8 years as Secretary of Commerce under Harding and Coolidge.)

Democrat: Alfred E. Smith (3 time Progressive Gov. of NY)

Smith was first Catholic to run for President. Hoover was a “dry” Quaker. Smith was a “wet” Catholic. Prosperity of 1920’s paved way for another Republican

and Hoover won big. By 1928- many signs of economic troubles...

ELECTORAL COLLEGE MAP OF 1928

1920’S STOCK MARKET

Throughout 1920’s, people bought items (electric appliances, radios, cars) using installment plans.

Companies prospered and people accumulated debt.

Stock Market: system of buying and selling shares in a company.

By 1929, nearly 4 million Americans (3% of population) owned stock in various companies.

1920’s stock market was a Bull Market: period of rapidly rising stock prices.

STOCK MARKET

Speculating: invest in stocks in the hope of gain but the risk of loss.

Stock price is dependent on its’ business model, customer base, the industry its in, the economy, etc.

High stock prices of late 1920’s motivated more people to invest.

NOVEMBER 6, 20141. Continue 22.1 Notes: SMC of ‘292. Video Clip: Stock Market Crash of

19293. 22.1 Guided Reading- Due at end

of class tomorrow

1920’S STOCK MARKET

Many people bought stock on margin (10-20% down payment, monthly payments to stock broker + interest)

If price of stock fell below loan amount, stockbroker could issue a margin call: demand investor repay loan immediately.

Investors were sensitive to a drop in stock prices and would sell, even if the stock was worth less than what they paid for it.

Many companies and banks invested also!!!

THE GREAT CRASH By late 1929: Stock Market running By late 1929: Stock Market running

out of new investors.out of new investors. Many investors began selling some Many investors began selling some

of their shares and priced dropped of their shares and priced dropped ((Supply of stocks to sell was Supply of stocks to sell was greater than demand to buy greater than demand to buy themthem.).)

As days went on, more investors As days went on, more investors did the same and prices dropped did the same and prices dropped more.more.

October 24October 24thth: Black Thursday: Black Thursday: : Market significantly dipped; many Market significantly dipped; many brokers issued Margin Calls.brokers issued Margin Calls.

12,894,650 shares were traded at significantly lower prices than they were purchased for.

October 29- Black TuesdayOctober 29- Black Tuesday Stock market crashes-16 Stock market crashes-16

million shares were sold @ far million shares were sold @ far less value than purchased- less value than purchased- The The Great CrashGreat Crash: : $30 Billion $30 Billion was was lost.lost.

NOVEMBER 7, 20141. Collect Current Event

2. Finish 22.1 Notes: Causes of the Great Depression

3. 22.1 Guided Reading and Vocab

CAUSES OF THE DEPRESSION

Banks Collapse for 4 reasons.

1.Loaned money to stock investors who will default on loans.

2.Invested customers money in stocks.

3.Not repaid on other loans.

4.Because of rumored bank failures or other losses, people tried to withdraw money: Bank Runs.

By 1931- 1,700 banks closed.

OTHER CAUSES OF THE DEPRESSION OVERPRODUCTION OF

GOODS LEADS TO BUSINESS STRUGGLES

By late 1920’s, most people had everything they wanted or could afford.

Lower consumption meant less production which led to employee layoffs.

By 1933, about 25% of Americans were unemployed.

OTHER CAUSES OF THE GREAT DEPRESSION

Tariffs June, 1930: Hawley-

Smoot Tariff Led to a decrease in

international trade. European countries then

enforced their own tariffs on U.S. products.