Ch. 14 Test Topics:
-- Causes of the Stock Market Crash
-overspeculation during the 1920's.
-lead to high demand
-prices of stocks were inflated
-stocks weren't worth what they were said to be worth
-speculators are people that look for a quick buck and are in it for a short time
-buying on credit (buying on margin)
-the process of buying stocks on credit.
-problem: brought a lot of people into the stock market
-price/demand of stock goes up and their inflated. (not actual value)
-rich people were getting richer
-poor people were getting poorer
-overproduction of goods
-compalnies making tons of product
-nobody was buying them
-the weren't making money
-stock prices were still skyrocketing
-they crashed on Black Tuesday
-too much borrowing from banks
-easy for people to borrow
-low interest rate
-people borrowed money to buy stocks
-price of stocks went up due to demand
-Stock oprices were grossly inflated, ddidn't have real value
-federal reserve increased interest rates
-fedral reserve looked and realized that the stock markets were dangerous
-increased interest rates
-people couldn't take out loans anymore
-lack of government regulation
-no rules regulating the stock market
-called "pooling"
-caused demand to rise quickly
EFFECTS
-The great depression
-Depression spreads to Europe and other parts of the world (the world is interependant.)
-banks closed
-people lost a lot/all of their money
-people lost jobs so they couldn't buy anything
-businesses lost money since people couldn't buy anymore
--Causes of the Great Depression (5)
*cycle of the depression: conpanies lay off workers, more people with less $ to spend, companies lose $.
(fixed if you can get it to go in the opposite direction.)
-over production of goods
-companies were making too many prducts that they weren't selling
-had to lay people off eventually
-underconsumption of goods by consumers
-people weren't buying things
-didn't have money because they were in debt because of buying too much in the 20's
-Agricultural slump due to overproduction
-farmers stuggled
-didn't have a boom like all other businesses
-high protective tariff polocies of the 1920's
-TARIFF-tax on foreign goods
-influenced people to buy American goods because of tariff (didn't wanna pay extra)
-was almsot bad for American business because the other countries did that to us
-Taxes benefiting the rich-rich got richer, poor got poorer
-people were in debt
-couldn't buy anything
-made it so more of the tax burden was on middle/lower class and the rich didn't have as much tax.
-made it tougher for middle/lower class to buy anything
-got layed off
-stock market crash
-fueled the Great Depression
EFFECTS
-New Deal - programs start - make the US gov't much larger
-Deficit spending starts
.spending more then you take in
.started doing this in the 30's
-The New Deal creates many organizations that are still around today
.Social Security taxes
.security exchange comission
-Fascist, millitary and communist dictators come to power throughout the world
Vicious Cycle of the GD
-companies lose $ so they lay people off
-undmployment rate goes up and less people buy goods as income has dropped
-companies profits fall so they have to lay more people off or close
-cycle repeats itself
1. 1928 Election(466)
Rebublicans (3)
-after convention, Hoover was in the lead
-Republicans were the presidents through the 1920's.
Democrat (3)
-Al Smith
-was against Prohibition, wanted people to be drinking again
-the "in thing" was to be for prohibition.
-was Catholic
-Hoover won. He was soft spoken and very optomistic.
2. Stock Market in the 1920's(466-468)
-market where people buy stocks
-people do that to make money but some lose money
-make money by dividens(if a company does good, you "own" part of it if you invested stocks in them.)
-Daw Jones is the top 30 publicaly owned companies (AT&T, Coka-cola, GM, Home Depot, IBM, American Express, McDonalds, Walmart)
-stock prices were inflated
3. Story of the stock market crash-not the causes(467-469)
-In March 1929 there was a day that the stocks started doing bad
-Charlie Mitchel saved the day by offering low interest rates so people could invest in stocks
-it helped the stocks - he saved the day
-Charlie and Mitchel tried to "save the day" again and so did other banks
-Believed they could pull the stock markets back up
-Money the 28th of October, they started dropping
-They crashed on October 29th, Black Tuesday
4. Banks and business' collapse(469)
-After the crash , people went into the banks to get all their money
-9,000-11,000 of the 25,000 banks failed during the 30's.
-unemployment rose from 3-25% in 1929
-4,000 of the 9,000 banks failed in 1933 alone
-Most things shut down in the first few years
-Businesses and things closed, which would explain the unemployment rate.
5. Effect stock market crash had on other countries(469-471)
-First country affected was England because we were the main country to traid with them
-Then started backing their money with gold
-South Africa was bad because they were based on gold
-It affected Germany after WW1 because we kept giving them loans but then they fell through
-Dictators started taking over
6. Depression in the cities(472-473)
7. Depression in the rural areas(473)
8. Dust Bowl(474)
9. Men in the Streets(475)
10. Women struggle to survive(475-476)
11. Children suffer hardships(476)
12. Social and psychological effects(477)
13. Hoover's background
14. Hoover's philosophy/Cautious steps(479)
15. Boulder Dam(480)
16. Democrats win 1930 Congressional elections(480)
17. Hoover takes action(481)
18. Bonus Army(482-483
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