Course Notes
THE GREAT DEPRESSION
CHAPTER 23 HOOVER & THE CRASH – Section 1
· Several signs of economic weakness surfaced during the late 1920’s.
THE STOCK MARKET
· As sections of the economy declined, the stock market continued to soar.
THE STOCK MARKET CRASHES
· The prices for industrial stock doubled between May 1928 and September 1929.
Stock Brokers who loaned people money wanted their money back
· Wednesday – October 23, 1929: 6 million shares a stock of changed hands
· Falling prices caused losses of $4 billion
BLACK TUESDAY
· October 29, 1929 stock market crumbles completely people rushed to sell, but there were no buyers
Investors who thought they had money, just had a piece of paper worth nothing
Millionaires lost their fortunes overtime
THE GREAT DEPRESSION BEGINS
· The stock market crash marked the start of a 12-year economic disaster.
· The crash was less a cause, than a symptom of a great crisis.
Overproduction was running rampid
AUTO & HOUSING INDUSTRY
· Housing and automobile manufacture were in decline.
· These industries had supported prosperity in the 1920’s.
· By the end of the decade those who could afford a home or car – bought one.
· 1926 – 1929: construction fell from $11 billion to $9 billion
· Jan – Sept 1929: car sales dropped by more than %33
BANKING CRISIS
Struggling farmers found it impossible to repay their bank loans.
Farm failures = bank failures.
Large city banks that loaned huge amounts to investors also failed.
People went to the bank wanting to close their savings.
More than 5,500 banks closed between 1930 and 1933.
Many depositors were left with NOTHING!
A CONTINUOUS SPIRAL
Without people to buy goods, workers lost their jobs, and factories closed.
Many companies were forced into bankruptcy - a financial failure caused by a company’s inability to pay its debts.
This caused even more layoffs!
GLOBAL IMPACT
After WWI many
CHAPTER 23 HOOVER & THE CRASH – Section 1
· Several signs of economic weakness surfaced during the late 1920’s.
THE STOCK MARKET
· As sections of the economy declined, the stock market continued to soar.
THE STOCK MARKET CRASHES
· The prices for industrial stock doubled between May 1928 and September 1929.
Stock Brokers who loaned people money wanted their money back
· Wednesday – October 23, 1929: 6 million shares a stock of changed hands
· Falling prices caused losses of $4 billion
BLACK TUESDAY
· October 29, 1929 stock market crumbles completely people rushed to sell, but there were no buyers
Investors who thought they had money, just had a piece of paper worth nothing
Millionaires lost their fortunes overtime
THE GREAT DEPRESSION BEGINS
· The stock market crash marked the start of a 12-year economic disaster.
· The crash was less a cause, than a symptom of a great crisis.
Overproduction was running rampid
AUTO & HOUSING INDUSTRY
· Housing and automobile manufacture were in decline.
· These industries had supported prosperity in the 1920’s.
· By the end of the decade those who could afford a home or car – bought one.
· 1926 – 1929: construction fell from $11 billion to $9 billion
· Jan – Sept 1929: car sales dropped by more than %33
BANKING CRISIS
Struggling farmers found it impossible to repay their bank loans.
Farm failures = bank failures.
Large city banks that loaned huge amounts to investors also failed.
People went to the bank wanting to close their savings.
More than 5,500 banks closed between 1930 and 1933.
Many depositors were left with NOTHING!
A CONTINUOUS SPIRAL
Without people to buy goods, workers lost their jobs, and factories closed.
Many companies were forced into bankruptcy - a financial failure caused by a company’s inability to pay its debts.
This caused even more layoffs!
GLOBAL IMPACT
After WWI many