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Ch.22 Sect.1: The Nation’s Sick Economy

Ch.22 Sect.1: The Nation’s Sick Economy. Industries in Trouble. Many couldn’t earn a decent living Railroads, textiles, steel… Why did rails struggle? Mining/lumbering New forms of energy Housing starts…. Farmers Need a Lift. Agriculture suffered most WWI Demand fell 

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Ch.22 Sect.1: The Nation’s Sick Economy

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  1. Ch.22 Sect.1: The Nation’s Sick Economy

  2. Industries in Trouble • Many couldn’t earn a decent living • Railroads, textiles, steel… • Why did rails struggle? • Mining/lumbering • New forms of energy • Housing starts…

  3. Farmers Need a Lift • Agriculture suffered most • WWI • Demand fell  • Production boosted, good idea? • Foreclosure • Price-supports • What did govt. do? • Coolidge

  4. Less $ to Spend/Credit • 1920s, Americans buying less • Why? • Production expanded faster than wages • Credit— • Installment plan • Consumer debt

  5. Uneven Distribution of Income • Rich got richer, poor got poorer • Income of Wealthiest 1% rose • 70% earned less than $2500 year • New clothes once a year • All the new products came out and many could not buy them!

  6. Election of 1928 • Hoover vs. Smith • Hoover was sect. of commerce • Smith career politician • What did Hoover count on? • Who won?

  7. Dreams of Riches in the Stock Market • 1929 economists began to warn people… • Stock market • Dow Jones Industrial Average • Through 1920s stock prices rose • “bull market” • How many owned stock? • Speculation— • Buying on margin— • What if value of stock declined?

  8. Stock Market Crashes • Sept. 1929 prices peaked and fell • October 1929, market plunged • Black Tuesday— • 16.4 million shares dumped • What about those that bought on credit? • Savings accounts? • $30 billion lost • Cartoons

  9. Financial Collapse • Great Depression— • People panicked and… • 1929, 600 banks closed • 1933, 11,000 failed • Savings? • 90,000 businesses bankrupt • Millions jobless • 25% unemployed 1933 • Did everyone lose money? • The Poorman’s Meal

  10. Worldwide Shock Waves • Most of Europe suffered throughout 1920s • Germany • Americans couldn’t sell products abroad • Hawley-Smoot Tariff Act=Highest ever • Did it work? • Causes pg. 677 (KNOW THESE!!!!!!!!!!!!!!!!!!!)

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