First we took a partner quiz on the causes and effects of the stock market crash and the Great Depression. Then we continued blog discussions.
Causes of the Stock Market Crash
Stock prices were over valued, over production of goods- they ended up laying people off because they weren't making any money.
Overspeculation during the 1920's-peoople who play the stock market and buy and sell, it drove the price for that stock, lead to huge demand of stocks, it didn't reflect on the companies value.
Uneven distubution of wealth
Too much borrowing from banks.
Stock prices were grossly inflated- didn't have real value.
Federal Reserve increased intrest rates- to try to stop people from buying things and borrowing money, when they did this, they crashed the whole economy because people got scared and sold their stock.
Lack of government regualtion. people started selling stock becuase they were nervous, buying on credit, buying on margin- buying stock on credit.
Stock market was based on borrowed money.
Effects
Investors and businiesses lose millions of dollars.
Thousands of banks failed.
Businesses cut production- laid off workers.
Unemployment rises- people quit spending money, Great Depression sets in.
Depression spreads to Europe and other parts of the world.
Causes of the Great Depression
Overproduction of goods- companies were making too many products, they weren't selling any because people were in debt, so the companies laid people off.
Underconsumption of goods by consumers
Agricultural slump due to to overproduction- planted too many crops, that was their solutionto make more money, prices dropped and they didn't make any money.
High protective tariff policies of hte 1920's- High tariffs to try to keep out foreign goods and to buy American goods. Other countries put high tariffs on the U.S.
Taxes bennefiting the rich- the rich got richer, poor got poorer.
Stock market crash- banks and businesses closed, unemplyment rose.
Effects
New Deal programs start- made the U.S. government larger, created jobs, regulated stock market.
Deficit spending starts- help the economy by putting money in it, give money to businesses.
The New Deal creates many organizatinos that are still around today- social security
Facist, military and communist dictators come to power throughout the world- people turned to more radical forms of government.
Companies loose money so they lay people off, unemployment rises, people don't have money so they don't buy anything, companies loose more money so they lay off more people or close and ect.
1. 1928 Election(466)
Republican- Herbert Hoover- better on the radio, Hoover won, liked prohibition
Democrat- Al Smith- better speaker, against prohibition, catholic- people were afraid that he would make the country turn catholic.
2. Stock Market in the 1920's(466-468)
A stock is a share of a company. The Dow Jones is an indicator of how the stock market is doing. It is made up of the 30 largest companies in the U.S. The stock market in the 20's was booming.
3. Story of the stock market crash-not the causes(467-469)
Thursday, Oct 24.- it crasher 11% right away, everyone went crazy. Richard Whitney bought U.S. steel stock to try to stop the crash. He bought it for more than it was worth. It worked tempararily for that day. Stock prices stoped for a while.
Over the weekend, the press made stories of how the stock market was going to crash. On Monday it crashed 13%. On Tuesday it crashed 12%. The executives would try to buy stock at a higher price, but people ignored it.
4. Banks and business' collapse(469)
Banks- stocks would go up and people would try to sell their stocks, the banks ran out of money to give people, 11,000 banks closed.
Businesses- people weren't spending money so the businesses had too many goods and they couldn't get rid of them, they would lay off people, 90,000 business closed.
5. Effect stock market crash had on other countries(469-471)
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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