NOVEMBER 4, 2013

1. Begin Unit IV: The 1930’s (The Great Depression and the New Deal)

2. 22.1 Notes (part 1) Election of 1928

3. 22.1 Vocabulary4. Unit III (1920’s) Exam Results

and Grades

UNIT IVTHE GREAT DEPRESSION & THE NEW DEAL 1929-1941

Chapters 22 & 23

22.1

Causes of Causes of the Great the Great DepressionDepression

PRESIDENTIAL ELECTION OF 1928

Three P’s were the 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

NOVEMBER 6, 2013

1. Continue 22.1 Notes: Stock Market Crash of 1929

2. 22.1 Guided Reading Q’s

1920’S STOCK MARKET

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

Companies prospered as people accumulated debt.

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

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

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

STOCK MARKET

You buy part of the company.

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

Bull Market vs. Bear Market

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

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

NOVEMBER 8, 2013

1. Continue 22.1 Notes: Stock Market Crash of 1929

2. 22.1 Guided Reading Questions

3. 22.2 Vocabulary4. Return Work

BULL MARKET SPARKED BY…

Growth in American industries Technological progress Increase in productivity Rise in national income from 33,200 million

to 79,200 million from 1914 to 1925 Expectation for great future and un-

boundless optimism for the market

1920’S STOCK MARKET

Many people bought stock on margin (10-20% down, monthly payments follow)

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

By late 1920’s, many NEW investors bid prices up.

Many companies and banks invested also!!!

THE GREAT CRASH Bull Market Bull Market lasted as long as lasted as long as

investors continued putting new investors continued putting new money in to it.money in to it.

Late 1929: Stock Market running out Late 1929: Stock Market running out of new investors.of new investors.

Many investors began selling some of Many investors began selling some of their share and priced dipped.their share and priced dipped.

As days went on, more investors did As days went on, more investors did the sam and prices dipped further.the sam and prices dipped further.

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

12,894,650 shares were traded October 29- Black TuesdayOctober 29- Black Tuesday Stock market crashes-16 million Stock market crashes-16 million

shares were sold @ far less value than shares were sold @ far less value than purchased- purchased- The Great CrashThe Great Crash.: By .: By mid-November, 1929: mid-November, 1929: $30 Billion $30 Billion was lost.was lost.

BANKS COLLAPSE Crash sparked a Crash sparked a

series of events that series of events that led to the led to the Great Great Depression:Depression:

Banks Collapse for 4 Banks Collapse for 4 reasons.reasons.

1.1. loaned money to loaned money to stockholders who will stockholders who will default.default.

2.2. invested customers $ invested customers $ in market.in market.

3.3. Not repaid on other Not repaid on other loans therefore stop loans therefore stop giving out any future giving out any future loans.loans.

4.4. Because of rumored Because of rumored bank failures, people bank failures, people quickly tried to quickly tried to withdraw their withdraw their money from the money from the banks: banks: Bank RunsBank Runs..

By 1931- 1,700 By 1931- 1,700 banks closed.banks closed.

OTHER CAUSES OF THE DEPRESSION1. OVERPRODUCTION OF GOODS

(Factories and Farms) Most Americans did not earn enough $

to buy all of the goods made or they already had everything then wanted.

Output increased at a higher % than worker wage increases.

Lower consumption meant less production which lead to employee layoffs.

Corporate profits grew however, leading to Uneven Distribution of Wealth.

OTHER CAUSES OF THE GREAT DEPRESSION

2. 2. Businesses close.In order to stay in business they must layoff workers-unemployment rises.

Henry Ford had to layoff 75,000 people.

By 1933, about 25% of Americans were unemployed.

OTHER CAUSES OF THE GREAT DEPRESSION

3. 3. TariffsGovernment tried to stimulate the economy by protecting American products.

June, 1930: The government passed the Hawley-Smoot Tariff

European countries retaliated by enforcing their own tariffs on U.S. products.

Lack of trade hurt the economies of both America and the world.

What about German reparations and British and French loan payment to the U.S.?????

REVIEW & FRIDAY WITH THE SUB Stock Market Basics Stock Market Crash

(October, 1929) Banks collapse (over

9,000 total) Other Factors:

1. Overproduction of goods on factories and farms

2. Uneven Distribution of Wealth

3. Businesses close leading to High Unemployment.

4. Tariffs- Hurt International Trade.

22.2 Vocabulary: Life in the Depression