Today we took a quiz over the great depression and the stock market crash. Now we are going to continue the assigned blogs
Ch. 14 Test Topics:
-- Causes of the Stock Market Crash
Buying Stock on margin was a leading factor to the stock market crash. What the thing was stock was said to be a good way to invest in and was safe. People would buy on margin meaning they would pay 10% on stock and a loaner would pay the rest, but if the stock did bad the person lost the 10% they paid for plus they had to pay the 90% back to the loaner. So everyone was trying to sell there stock but no one would buy them thus the stock market crashed.
Buying on Credit was another factor. People bought things on credit and they soon became satisfied with what they had. The companies kept making products at same rate so they became really inexpensive which didn't help.
People went to banks to get loans and the bank would give them the loan from other peoples accounts but they didn't pay back the money. So then people who got money taken from didn't hve money anymore then banks went bankrupt. 11,000 of the 25,000 banks failed in that time.
Stock prices were overvalued and companies were losing money. people kept selling and then stock went down. people were guessing if the stock was gonna be good or not so they were in for short term and that is bad. high demand for stock and stock prices were grossly inflated, did not have real value. Over production. Since interest rates went up people stopped borrowing money and it hurt the economy. lack of government regulation
--Causes of the Great Depression
People thought the great depression started with the Black Tuesday Stock Market Crash but it didn't the great depression started in early 1929. The great depression wasn't over until about 1941 so it lasted about 12 years with unemployement hitting a high of 25%. Some main Causes of the great depression are buying on margin, buying on credit, Supply and demand, The Stock market crash,Drought.
Buying on Margin: The stock market was going up so people could become rich by buying stock and buying on margin but when prices declined everyone become poor.
Buying on credit: People in the 20's bought on credit, but when the stock market crashed people started getting debts and couldn't pay back what they owed.
Supply and demand: Farms and factories were producing goods at the same rate even if prices rose but people couldn't afford it so the farms and factories had to cut back production because they didn't make any money and they had to lay off people and this trend continued until 25% of the population was unemployed.
Stock Market Crash: People had stocks but they had heard that things were going to fail so they started to sell all of their stock. Since there were no people to buy the stock the stock market hit the black Tuesday market crash.
Drought: The area from Texas to North Dakota received a major drought in the 30's because the land was over plowed, over grazed, lack of rain, and wind erosion. This lead to the Dust Bowl. Many of the farmers were hit by this and the moved west but weren't welcome so they received little money
People went to banks to get loans and the bank would give them the loan from other peoples accounts but they didn't pay back the money. So then people who got money taken from didn't hve money anymore then banks went bankrupt. 11,000 of the 25,000 banks failed in that time.
Vitious cycle: Companies lose money they lay off workers people don't have money to spend and it repeats. overproduction of goods nad underconsuption of goods by consumers. Tarriffs were raised and we stopped buying over seas. Farmers overproduced and the prices for their crops went down.
1. 1928 Election(466)
came off two republican presidents. Herbert Hoover was republican nominee. Secretary of commerce. Never has a leader. Had little political experience.
Al Smith was governer of new York for like 3 terms. Had a lot of political experience. Democrat.
Biggest reason Hoover won was because there were republican presidents during the 20's and americans didn't want a change because they like republican philosophy.
Al Smith was against prohibition and that made him look not sound. He was a catholic and our country was founded on anti-catholic and they wanted freedom from catholics.
2. Stock Market in the 1920's(466-468)
Dow-Jones industrial average: Are the 30 largest companies at the time and it is an indicator to set how the stock market might do.. Dow compiled the index as a way to gauge performance. It reached into the 300 poiint area. Higher then before. money was lost.
Stock is a share of a company
3. Story of the stock market crash-not the causes(467-469)
Everything in the stock was great and no one thought anything would go wrong. on march 35 there was a small crash. People got nervous and sold there stocks and the market went bad. Charles MItchel was a big bank investor and he promised loans for people for stock. 24 of October everyone starting panicking because stocks were bad and they started selling again. Then on Black Tuesday it completely crashed. Charles Mitchell tried saving the market again but this time it didn't work.
4. Banks and business' collapse(469)
People couldn't pay back loans and banks lost money then closed. People didn't trust banks and kept money in their house. 11,000 of the 25,000 banks failed
Businesses overproduced products and people didn't buy things and 90,000 businesses failed. unemployment rose to about 25%
5. Effect stock market crash had on other countries(469-471)
The depression spread to other countries and in that they had the same effects as the united states and ultimately some countries started having dictatorships because they trust dictators more.
6. Depression in the cities(472-473)
life was not great. People lost jobs so they didn't have any money to pay for homes and payments and they became homeless and started making shantytowns also known as hoovervilles. They would build homes with trash and any scrap metal they could find. They rumaged through garbage to try to find food and other things for money. Racism was big. They thought latino's and black's stole their jobs and started kicking them out of our country because thats why the lost jobs. Soup kitchens started forming and other places started forming to help the homeless and this was done by local people.
7. Depression in the rural areas(473)
they didn't have as many effects because they could grow there own food. But they became in debt because of overproduction. The dust bowl also destroyed crops. They had no money though.
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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