We continued to do our blog discussions.Causes of the Stock Market CrashStock 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 wealthToo 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.EffectsInvestors 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 DepressionOverproduction 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 consumersAgricultural 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.EffectsNew 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 securityFacist, 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)Other countries weren't doing as good as the U.S. was. Germany was worse than the U.S. in the Great Depression.6. Depression in the cities(472-473)Manufactures were hit hard. They laid off their workers, suicide went up, people who wanted money would turn to organized crime, city officials didn't want to do anything about it.7. Depression in the rural areas(473) lead to starvation, had too many products, dstroyed things to get prices down, lead to unfaithfulness in the government, helped build characters- they started to save and appreciate what they had.8. Dust Bowl(474)The dirty thirties- 1930-1936, caused by famers- they didn't rotate crops and there was a drought. Black Wizards- couldn't see in front of your face, houses were destroyed. Oakies- people who left Oklamhoma and the Great Plains and moved to California to work.9. Men in the Streets(475) They became migrant workers- they were hobos, and they traveled on trains to work in different towns. They developed differnt signs. Hoovervilles were made of cardboard houses and they were on the side of roads, blamed Hoover for the problems. 25% were homeless.10. Women struggle to survive(475-476)Women wre too embarrassed to go into a bread line, men were the ones who put food on the table. Started working outside of the home, but men didn't like it because they thought that they were taking their jobs. In many areas, people wouldn't hire women because they weren't in bread lines.11. Children suffer hardships(476)Children got rickets, they had poor diets, 2000 schools closed so they didn't get an education, teenagers left their families and became hobos.12. Social and psychological effects(477)13. Hoover's background14. Hoover's philosophy/Cautious steps(479)Shared time- more people have jobs but they work lessRugged Individualism- people fend for themselvesLaissez Faire- government stays out of businessTrickle down theory- tax breaks to big businesses and upper class. the saved money will be used to hire middle/lower classFiscally Responsible- Hoover (responsible with money)15. Boulder Dam(480)Tallest, second largest dam in worldHoover authorized productionRegulate water, water creates electricity, agriculturePaid for itself through selling of electricity (self-liquidating), creating profitBoulder Dam (Colorado River) now called Hoover16. Democrats win 1930 Congressional elections(480)Hoover Republican- people going against him after GDCongress seats go to DemocratsSenate Republican by 1 voteHooverville- depression struck towns, Hooverblankets (newspapers people slept with for warmth)17. Hoover takes action(481)Glass Steagle Act - easier for companies to get loans, raised gold reservecuts taxesRFC- reconstruction finance corporation- businesses given money to expand business and hire peopleFederal Farm - buy surplus crops, store it, sell when prices high (actually drove prices down)Federal Home Loan Bank Act- help farmers keep farms, homeowners keep homesNational Credit Corp.- set up by large banks to loan money to small banks in times of needBoulder Dam project18. Bonus Army(482-483War vets and families gather in DC to protest- money on certificates from service valid in early 40's, need it during GD and gov't won't give it to themSome finally left- ones that didn't leave were driven out by national guard, tear gas usedMade Hoover look really bad
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