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The roaring twenties

The “Roaring Twenties”

11:30


The roaring twenties

MassConsumptionSociety.2


The roaring twenties

While mass production and mass consumption were born in the 1800s, Henry Ford took them to a whole new level in the early 1900s with the assembly line process where a car’s frame moved along a conveyor belt and workers stationed along it would attach various parts to it until by the end of the line it was a complete car. Although for workers, such repetition could be mind-deadening, it was also very efficient, cranking out a new car every five minutes.

Such a technique also forced the production of a more standardized product. As Ford put it, you could have a car in any color you liked, as long as it was black.


The roaring twenties

This had two major effects. It lowered the price of building a car and thus the price Ford could charge for a new car, vastly expanding the potential market for his cars. Secondly, it raised profits which allowed Ford to pay his workers more, thus creating an even bigger market that could afford his cars.

Not only did other car manufacturers, most notably General Motors, adopt the assembly line production, so did other types of products, which just accelerated the process toward a more widely based mass consumption society.


The roaring twenties

An Age of Mass Media

One of the great innovations of the century was the revolution in reproducing sound. For the first time, people could listen to music without having to make it or listen to it live. The gramophone, as it was then called, was the progenitor of all our modern stereos, including the personal stereo. It also began a trend with music, much like the printing press had 450 years earlier, of making its enjoyment a much less social, as well as more passive, experience. Later innovations, such as the iPod, would accelerate this tendency to fragment society in favor of more private experiences


The roaring twenties

Talkies. In 1927, the first movie with sound, The Jazz Singer, debuted. Although the parts with Al Jolson’s singing were the only scenes with sound, The Jazz Singer set a new standard for movies, and silent films were soon a thing of the past.

The two faces in the middle are both Al Jolson, one of them in blackface, a popular stereotype of African Americans from the 1830s until the Civil Rights movement in the 1960s. A montage of such stereotypes in the twentieth century from Spike Lee’s movie, Bamboozled,canbe seen at http://www.youtube.com/watch?v=C45g3YP7JOk


The roaring twenties

So were a lot of silent film stars. For one thing, some of them didn’t have voices suited for talkies. Also, the new type of film required a new more natural and subdued style of acting, because the exaggerated gestures of silent films were no longer needed. Movies from the late 1920s and early 1930s, such as the Oscar winning All Quiet on the Western Front, reflect this transition, being more natural than older silent films, but still retaining a bit of their more exaggerated gestures and blocking.


The roaring twenties

Early films and sound recordings also tended to play back a bit fast, creating a higher pitch and tinny quality to the voices. Only in recent years have the recordings of early blues musicians, such as Robert Johnson, been re-mastered for proper pitch.


The roaring twenties

Radio came into its own, especially with regular commercial broadcasting in the late 1920s and became a fixture in millions of homes. In one sense, it helped create a more global community as people listened to the same entertainment and news (starting in the 1930s)

1926


The roaring twenties

In another sense, radio created less of a sense of local community as families stayed at home gathered around the radio. Like the phonograph, it also made listening to music a more passive and private experience instead of an active and social one.

Radio also provided a medium for politicians to spread their messages to millions of people at once, however benign or malicious those messages might be.


The roaring twenties

Architects such as Frank Lloyd Wright tried to counter this trend away from the social and toward the private realm by designing houses with small bedrooms to force people together into a central space. However, other inventions in the twentieth century, such as television, portable record players, personal stereos, and air conditioning, would further separate families from their communities and family members from each other.

Left: Wright’s Falling Waters House

Below: Vandamm House


The roaring twenties

Left & below Below: Wright’s Massarolakehouse just finished in 2007


The roaring twenties

Massaro House counter-clockwise from left: Kitchen, drawing room, and skylight


The roaring twenties

Massaro House: The living room, a large open space to encourage people coming together.


The roaring twenties

Massaro House: Bedrooms, including the master bedroom below


The roaring twenties

Power to the people. The new technology of the 1920s (light bulbs, telephones, radios, movies, vacuum cleaners, and even lie detectors) all had one thing in common. They ran on electricity. At first, power was produced by small generators for a limited market at high prices. The belief then was that each street or family needed its own generator. One problem with electricity was that it couldn’t be stored, thus making it expensive and limiting its market to a few wealthy people. For example, Chicago in the 1890s had twenty generators serving only 5,000 customers.

1926


The roaring twenties

Enter British-born Samuel Insull (1859-1938, who, after working for Thomas Edison, moved to Chicago in 1892. Using more efficient steam turbine generators (that could be stepped up at little cost during times of peak need) Insull saw that if he could generate electricity for large numbers of customers, he could count on more consistent demand, operate more efficiently with less waste, and charge lower prices per kilowatt. The lower prices would attract more customers, allowing him to expand his operations, and so on.

1926


The roaring twenties

Insull also expanded his customer base by wiring houses cheaply & giving away electric appliances. By the late 1920s, he had wired Chicago, the state of Illinois, & 4,000,000 customers in thirty-two states. Thanks largely to his vision, cheap electrical power became available to the masses as the price of electricity per kilowatt (adjusted to 1992 dollars) went from $4 in 1892 to $1.56 in 1912 to 55¢ in 1927 to 9¢ in 1967.

Insull built the Civic Opera House in Chicago in 1929. It was built in the shape of a throne facing west, away from New York City, which had supposedly spurned his efforts.


The roaring twenties

From capitalist hero to villain. To finance his enterprises, Insull had sold low-price bonds and stocks to over a million middle-class Americans. Unfortunately the stock market crash of 1929 made their investments worthless, and almost overnight Insull went from hero to villain, owing $16 million dollars more than he was worth, making him "too broke to be bankrupt”, as one banker put it. In 1934, he was charged with fraud, acquitted of the charges, and moved to Paris where he died in 1938.

1923

May, 1934


The roaring twenties

Girls just want to have fun: The New Woman of the 1920s


The roaring twenties

Flappers. The new modern women of the 1920s not only had the vote, but an unprecedented amount of social freedom. While most women still followed more traditional roles and lifestyles, there were a number of young women, typically referred to as flappers, who exhibited a freer lifestyle than ever before.


The roaring twenties

A flapper was typically urban, single, socially free, and affluent enough to pursue such a life, either from having her own job or an indulgent father (known commonly as a dapper).


The roaring twenties

The flapper’s hair was short, typically in a pageboy cut known as a bob. Her dresses were loose (thanks to the demise of the corset) and also short, showing an unprecedented amount of leg up to and even above the knee.

Adding to the more liberated and waif-like image was a preference for a more flat chested look to de-emphasize more traditional female roles. This is a trend that has alternated with the more full-bodied look ever since.


The roaring twenties

She tended to wear a good deal of eye makeup, something only women of ill repute were previously allowed to do. Thus for women in the 1920s, wearing makeup was seen as liberating. A flapper might even be a smoke-eater (i.e., woman who smokes cigarettes).


The roaring twenties

“Flapper speak.” Along with the flapper’s new lifestyle came a profusion of new words and expressions. Below are a few select terms that suggest women’s rapidly changing status and attitudes in the twentieth century:

Petting party- Social event devoted to hugging

Snugglepup- Man who likes petting parties

Alarm clock- A chaperone

Father time- Any man over 30 years old

Fire alarm- A divorced woman

They- refers to objecting parents

Cat's Pajamas or Frog's eyebrows-

Anything that's good

Goof-Flapper's sweetheart

Biscuit- A pettable flapper

Barney-muggin- Love-making

Drop the pilot- Get a divorce

Police-dog- Young woman's fiancé

Handcuff- Engagement ring

An alibi- A box of flowers

Forty-niner- Man prospecting for a rich wife

Strike breaker- A woman who dates a friend's

"steady" during a coolness

Mad money- Carfare home if she has a fight

with her escort


The roaring twenties

Coco Chanel, a French orphan who revolutionized women’s fashions in the 1920s by introducing clothing that felt as good as it looked. Among her innovations were sports clothes, red lipstick, bobbed hair, and even trousers for women.


The roaring twenties

Leisure fashions from the 1920s, including ”ski chic”.


The roaring twenties

From the early 1920s to the early 1930s the standard head gear for women was the cloche hat. One side effect of this was the much shorter hair styles for women in the 1920s.


The roaring twenties

The flappers of the 1920s shocked their mothers by showing their natural shapes.

Left & right: Louise Brooks & Colleen Moore, two very modern looking & extremely popular silent film stars of the 1920s, who popularized bobbed hair, but are barely remembered now.


The roaring twenties

Colleen Moore is best remembered today for her fairy castle dollhouse which resides in Chicago’s Museum of Science and Industry.


The roaring twenties

Cocktails and Prohibition

The 18th Amendment (1920), which prohibited alcohol production and consumption in America, can be said to have been another (fleeting) victory for women, since it was largely pushed by women suffering neglect and abuse because of their husbands’ alcoholism. However, Prohibition hardly slowed down alcohol production or consumption. It merely made it the realm of gangsters, such as Al Capone in Chicago, and illegal bars, known as speakeasies, where one could buy “bathtub gin.”

Below: a cocktail flapper and other examples of the wild nightclub life

of speakeasies in the 1920s.


The roaring twenties

Due to the typically poor quality of these drinks, they were often mixed

with each other and different beverages. Thus was born the cocktail.

With the cocktail, a new character appeared on the social scene: the bartender who knew the secrets of mixing the hundred or so new drinks made popular at the time. In addition, really good bartenders had their own secret formulas for cocktails that made them especially popular. There was even a novel, Poet’s Pub by Eric Linklater about people trying to track down a bartender with the formula to the Blue Cocktail.


The roaring twenties

By 1933 Prohibition had proved to be such a dismal failure that it was repealed by the 21st Amendment.

Below: Al Capone and the scene of the infamous St Valentines Day Massacre in 1929 which brought him the unwanted attention of the federal government.


The roaring twenties

But not all women were as liberated as the flappers.

Left: My grandmother (center) and grandfather (c.1920). He was a popular vaudeville star who ran off with another woman, leaving my grandmother as a single mom in the 1920s to raise my mother (the two of them pictured lower right, c.1920).


The roaring twenties

Loss of faith in econ.

Panic selling

Less buying & investment

Loss of jobs & consumers

Cut production

Unstable world econ. in 1920s despite illusion of prosperity

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Stocks drop

Agr. Boom in US from selling grain to Eur.

Higher prices & heavier competition  fewer mkts

Tariffs to protect home mkts

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Unbalanced $ flow to US for loans, goods & resources

US loans & sales to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)

5000 US banks, which over-invested in stock mkt, crash  Eur. Banks crash when US banks call in loans

Worldwide depression (FC.132)


The roaring twenties

FC.93A “TULIPMANIA”: THE FIRST MODERN SPECULATIVE BOOM (1636-37)

Difficult for artisans to make profit

Prices paid for tulips dramatically & rapidly rise

Rich look for new ways to spend money

Botany & gardening fashionable among the rich

Growing speculative market in tulips

Demand increases while supply remains constant

Tulips slowly reproduce  Ltd. supply

Panic since so many borrowed to buy

Buy bulbs on basis of future profits Danger of debt

Buy bulbs w/goods, land, & even a trade ship for 1 bulb

Genes for most beautiful designs are recessive Unlikely a bulb will produce the desired design

Eventually, people see tulips are extremely over-priced Everyone wants to sell

No demand  Prices rapidly drop

Allure of eastern goods, scarcity of tulips, & little need for capital investment Lucrative to grow & trade them

Sudden collapse of “tulipmania”

Age of Explor.  New mkts & sources of $ (FC.81)

Scientific Rev. of 1600s More interest in science (FC.97)

Printing press circulation of new scientific findings (FC.74)

Trade w/Turks Tulips reach Antwerp by 1562 (FC.93)


The roaring twenties

What typically happens to economies right after a war & why?


The roaring twenties

Post-war depression

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev  Indep (1937)

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev  Indep (1937)

New products & tech’s

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

British dominance of world trade in 1800s


The roaring twenties

British dominance of world trade in 1800s

Britain

Raw materials

£££££££

Manufactured goods

££££££££££££


The roaring twenties

U.S. dominance of world trade in early 1900s

U.S.

Raw materials

$$$$$$$

Manufactured goods

$$$$$$$

LOAN$$$

$$$$$$$$$$


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr. Ger

 Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Typical way to protect Mkts?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Prices & their effect?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Grain prices after WWI?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

A farmer faces foreclosure and forcible eviction from his land. Although this was a scene commonly associated with the Great Depression in the 1930s, it was part of a pattern starting in the 1920s when grain prices plummeted after the end of World War I.


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

How much must stocks rise/yr to break even?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

Stocks must rise 10-15%/yr to break even  Psychology of investors?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B $3.64B

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B 

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

1928- Mkt up unprec. 86pts

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

1928-Mkt up unprec. 86pts

1929-110 pts in 3 months

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at ?


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150

Investor A’s stock is at $1600

Investor B’s stock is at $1400

Investor C’s stock is at $1200


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150

Investor A’s stock is at $1600

Investor B’s stock is at $1400

Investor C’s stock is at $1200

When stocks start to fall, who sells first and why?


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150

Investor A’s stock is at $1600

Investor B’s stock is at $1400

Investor C’s stock is at $1200

When stocks start to fall, C sells out first since it’s closest to losing $

-> Stock market?


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150

Investor A’s stock is at $1600

Investor B’s stock is at $1400

Investor C’s stock is at $1200

When stocks start to fall, C sells out first

-> Stocks continue to fall

-> Who sells out next?


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150

Investor A’s stock is at $1600

Investor B’s stock is at $1400

Investor C’s stock is at $1200

When stocks start to fall, C sells out first

-> Stocks continue to fall

-> B sells out

-> Stock Market?


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150

Investor A’s stock is at $1600

Investor B’s stock is at $1400

Investor C’s stock is at $1200

When stocks start to fall, C sells out first

-> Stocks continue to fall

-> B sells out

-> Stocks continue to fall

-> What does A do?


The roaring twenties

3 investors each borrow $1000 at 15% interest to buy stocks

To break even (incl. 15% int.), each investor needs stock to be at $1150

Investor A’s stock is at $1600

Investor B’s stock is at $1400

Investor C’s stock is at $1200

When stocks start to fall, C sells out first

-> Stocks continue to fall

-> B sells out

-> Stocks continue to fall

-> A sells out


The roaring twenties

Post-war depression

-France: 500% inflation

-Low birth rate

Slower pop. recovery

-More agr. Econ

Ind econ less affected by Depr.

-Br exports to Fr down 65%

& to US 42.6% by 1921

-Irish rev Indep (1937)

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

1928-Mkt up unprec. 86pts

1929-110 pts in 3 months

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Unstable world econ. in 1920s despite illusion of prosperity

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

1928- Mkt up unprec. 86pts

1929-110 pts in 3 months

The Crash (10/24 & 10/29)

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

1928- Mkt up unprec. 86pts

1929-110 pts in 3 months

The Crash (10/24 & 10/29)

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

1928- Mkt up unprec. 86pts

1929-110 pts in 3 months

The Crash (10/24 & 10/29)

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

New products & tech’s

-Refrigeration, comm. air travel, talking

films, radio, vacuum cleaners, cars

-80% new ind’s in US

Fr & Br relied on $ fr.Ger

Ger relied on $ from US

 $3.5B invested in Eur,

$1B alone in Ger.

1916-26- $1.90->$1.12/ bushel

Cash & Credit (1920-29)

-Cash: $3.68B  $3.64B ~1% drop

-Credit: $45.3B  $73B 61.8% rise

1928- Mkt up unprec. 86pts

1929-110 pts in 3 months

The Crash (10/24 & 10/29)

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

The scene on Wall Street and the floor of the New York Stock Exchange on”October 24, 1929 (AKA “Black Tuesday”) was chaotic and, in some cases, suicidal. Cynical hotel clerks asked customers if they wanted a room so they could sleep or jump.


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232  $22

  • -Some stocks $100-  $0.50

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. prices fall in 1920s when Eur. can feed itself again

Agr. Boom in US from selling grain to Eur.

Unstable world econ. in 1920s despite illusion of prosperity

Cut production

Loss of jobs & consumers

Less buying & investment

Panic selling

Stocks drop

Loss of faith in econ.

Buying & investment?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. prices fall in 1920s when Eur. can feed itself again

Agr. Boom in US from selling grain to Eur.

Unstable world econ. in 1920s despite illusion of prosperity

Cut production

Loss of jobs & consumers

Less buying & investment

Panic selling

Stocks drop

Loss of faith in econ.

Production?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. prices fall in 1920s when Eur. can feed itself again

Agr. Boom in US from selling grain to Eur.

Unstable world econ. in 1920s despite illusion of prosperity

Cut production

Loss of jobs & consumers

Less buying & investment

Panic selling

Stocks drop

Loss of faith in econ.

Jobs & consumers?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

  • 1929-33-US ind. prod. fell

  • 50% & Nat’l income 75%

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

  • 1929-33-US ind. prod. fell

  • 50% & Nat’l income 75%

  • Avg. work week 6 3 days

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

  • 1929-33-US ind. prod. fell

  • 50% & Nat’l income 75%

  • Avg. work week 6 3 days

  • 13m. unempl 25% WC

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

  • 1929-33-US ind. prod. fell

  • 50% & Nat’l income 75%

  • Avg. work week 6 3 days

  • 13m. unempl 25% WC

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Higher prices & heavier competition  fewer mkts

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Loss of jobs & consumers

Less buying & investment

Panic selling

Stocks drop

Cut production

Impact on Banks?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)

5000 US banks, which over-invested in stock mkt, crash  Eur. Banks crash when US banks call in loans


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

  • 1929-33-US ind. prod. fell

  • 50% & Nat’l income 75%

  • Avg. work week 6 3 days

  • 13m. unempl 25% WC

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Tariffs to protect home mkts

Stocks drop

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)

5000 US banks, which over-invested in stock mkt, crash  Eur. Banks crash when US banks call in loans


The roaring twenties

Crowds mob a bank to get their savings out before the worsening depression consumes them. Unfortunately, thousands of banks across the U.S. had already lost their money and some 5,000 of them had to close down, taking their investors’ savings with them.


The roaring twenties

A New York City policeman guards a closed bank against any angry investors.


The roaring twenties

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr.Ger

  • Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90->$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B  $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

  • 1929-33-US ind. prod. fell

  • 50% & Nat’l income 75%

  • Avg. work week 6 3 days

  • 13m. unempl 25% WC

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Agr. Boom in US from selling grain to Eur.

Agr. prices fall in 1920s when Eur. can feed itself again

Higher prices & heavier competition  fewer mkts

Unstable world econ. in 1920s despite illusion of prosperity

Loss of faith in econ.

Loss of jobs & consumers

Less buying & investment

Panic selling

Stocks drop

Cut production

5000 US banks, which over-invested in stock mkt, crash  Who else was affected?

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)

5000 US banks, which over-invested in stock mkt, crash  Eur. Banks crash when US banks call in loans


The roaring twenties

  • Post-war depression

  • -France: 500% inflation

  • -Low birth rate longer to recover pop.

  • -More agr. Ec less affected by Depr

  • -Br: Exports down 65% to

  • Fr & 42.6% to US by 1921

  • -Irish revIndep (1937)

  • New products & tech’s

  • -Refrigeration, comm. air travel, talking

  • films, radio, vacuum cleaners, cars

  • -80% new ind’s in US

  • Fr & Br relied on $ fr. Ger

  •  Ger relied on $ from US

  •  $3.5B invested in Eur,

  • $1B alone in Ger.

  • 1916-26- $1.90$1.12/ bushel

  • Cash & Credit (1920-29)

  • -Cash: $3.68B $3.64B ~1% drop

  • -Credit: $45.3B  $73B 61.8% rise

  • 1928- Mkt up unprec. 86pts

  • 1929-110 pts in 3 months

  • The Crash (10/24 & 10/29)

  • 13m. Shares sold in hours

  •  Some fell $75/share

  • 11/ 1- Mkt had lost $40B

  • 11/13- Mkt fell 469-220

  • 1932- Stocks down 75%

  • -US Steel: $232 $22

  • -Some stocks $100 $0.50

  • 1929-33-US ind. prod. fell

  • 50% & Nat’l income 75%

  • Avg. work week 6 3 days

  • 13m. unempl 25% WC

Panic selling

Less buying & investment

US loans & sales to Eur.

Unbalanced $ flow to US for loans, goods & resources

Tariffs to protect home mkts

Higher prices & heavier competition  fewer mkts

Agr. Boom in US from selling grain to Eur.

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Stocks drop

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Unstable world econ. in 1920s despite illusion of prosperity

Agr. prices fall in 1920s when Eur. can feed itself again

FC.131 POST WAR BOOM AND BUST (1920-29)

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)

5000 US banks, which over-invested in stock mkt, crash  Eur. Banks crash when US banks call in loans

Worldwide depression (FC.132)


The roaring twenties

  • "Brother, Can You Spare a Dime," lyrics by Yip Harburg, music by Jay Gorney (1931)

    • They used to tell me I was building a dream, and so I followed the mob,

    • When there was earth to plow, or guns to bear, I was always there right on the job.

    • They used to tell me I was building a dream, with peace and glory ahead,

    • Why should I be standing in line, just waiting for bread?

    • Once I built a railroad, I made it run, made it race against time.

    • Once I built a railroad; now it's done. Brother, can you spare a dime?

    • Once I built a tower, up to the sun, brick, and rivet, and lime;

    • Once I built a tower, now it's done. Brother, can you spare a dime?

      • Once in khaki suits, gee we looked swell,

      • Full of that Yankee Doodly Dum,

      • Half a million boots went slogging through Hell,

      • And I was the kid with the drum!

    • Say, don't you remember, they called me Al; it was Al all the time.

    • Why don't you remember, I'm your pal? Buddy, can you spare a dime?


The roaring twenties

Unstable world econ. in 1920s despite illusion of prosperity

Panic selling

Higher prices & heavier competition  fewer mkts

US loans & sales to Eur.

Stock mkt craze in US where investors pay only 10% down & borrow rest from banks at 10-15% interest

 Stocks must rise 10-15%/yr to break even  Investors prone to panic selling at 1st sign of trouble

Tariffs to protect home mkts

Agr. Boom in US from selling grain to Eur.

Unbalanced $ flow to US for loans, goods & resources

Agr. prices fall in 1920s when Eur. can feed itself again

Agr crisis in US when farmers can’t pay mortgages on land bought during the war

Stocks drop

Loss of faith in econ.

Cut production

Loss of jobs & consumers

Less buying & investment

FC.131 POST WAR BOOM AND BUST (1920-29)

***

A

After-effects of World War I on world economy (FC.128)

Eur’s rebuild ind’s, but don’t reclaim mkts (FC.128)

US takes over many Eur. Mkts (FC.128)

5000 US banks, which over-invested in stock mkt, crash  Eur. Banks crash when US banks call in loans

Worldwide depression (FC.132)


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