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The Roaring Twenties: Prosperity to Depression

Explore the 1920s from Teapot Dome Scandal to Herbert Hoover's response to the Great Depression. Learn about stock market terms, overproduction issues, and more.

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The Roaring Twenties: Prosperity to Depression

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  1. December 16, 2014 Tuesday: F, G, A, B, C, D

  2. Opening Question • Name one specific event that caused fear of the “reds” in the 1920s? • How does Palmer’s justify his raids against suspected communists? Homework: Chapter 22, section 1 Outline

  3. The Teapot Dome Scandal • Oil-rich public lands reserved for the U.S. Navy • Teapot Dome Wyoming • Elk Hills, California • Sec of the Interior, Albert B. Fall • Transfers reserves from navy to his department

  4. The Teapot Dome Scandal • Fall leases land to two private oil companies • Receives $400,000 • 1st cabinet member convicted of a felony while holding office

  5. The Presidents of the 1920s Calvin Coolidge 9:08-16:55 Coolidge was left cleaning up after the scandals of Harding’s administration. What did he do to restore the dignity of the presidency? For what personality trait was Coolidge known? The `20s was an especially prosperous time. According to the video, what led to this prosperous state? Warren Harding 00:00-9:08 • In the election of 1920, why were the American people crying for change? • There were many factors that led to the election of Warren Harding. Name at least two. • According to the video, Harding was a terrible president. What made him so bad? • Harding had a few major scandals. All of these scandals have the same basic cause. What was the cause of the scandals?

  6. Washington Naval Conference The USA loaned European nations billions of dollars to help rebuild after WWI The U.S. hosted a naval conference aimed to reduce the military strength of all nations

  7. Kellogg – Briand Pact of 1928 • French Foreign minister asked US to join an alliance against Germany • US instead, proposed a treaty that 1. Outlawed war as an instrument of national policies 2. Required nations to resolve their disputes by pacifist means • 14 nations signed the agreement, 48 later joined • No instruments of enforcement, rather relied on the “moral force” of countries.

  8. The 1920s saw a burst of personal prosperity and consumer spending Companies offered ways for consumers to buy on credit through monthly installment plans Mass production led to a huge number of new products: Cars, electric appliances, new fashions Advertising boomed to convince people to spend their money

  9. Prosperity Now Financial Ruin later • Installment buying • using credit and paying back in small amounts, was introduced • People buy major appliances and cars on credit • Increase in debt per person

  10. OVERPRODUCTION IN INDUSTRY • Businesses begin to overproduce items • Too few workers could afford to buy the factory output. • The surplus products could not be sold overseas due to high tariffs and lack of money in Europe.

  11. FARM OVERPRODUCTION • Due to surpluses and overproduction, farm incomes dropped throughout the 1920’s. • The price of farm land fell from $69 per acre in 1920 t0 $31 in 1930. • Agriculture was in a depression which began in 1920, lasting until the outbreak of World War II in 1939. • In 1929 the average annual income for an American family was $750, but for farm families it was only $273. • The problems in the agricultural sector had a large impact since 30% of Americans still lived on farms. Surplus ears of corn

  12. Herbert Hoover • Why wouldn’t Hoover help the desperate American people during the Depression? • How did Depression-era American view Hoover?

  13. Depression

  14. The Great Depression The Crash: https://www.youtube.com/results?search_query=crash+course+32

  15. Stock Market Terms • Stock- A share in ownership of a company. Prices of stocks tend to move up and down. • Speculation- Buying of stocks that are expected to rise in price. When the price rises, a person will sell the stock at a profit. • Usually Short term investment

  16. Stock Market Terms • Margin- This is when somebody buys a stock for only a fraction of its cost. They then get a loan to pay off the rest of the stock. • I might pay 5% for a stock and then use a loan to pay the other 95% • Allows for someone to buy more shares of s stock • If all goes well, your stock will rise in price and you will be able to pay off your loan and make an extra profit.

  17. 1920’s Stock Market • During the 1920s many people were buying and selling stocks at a large profit. • Buying on Margin became very popular • Many people were pouring their life savings into stocks

  18. Speculation and Margin Profitable Example Margin • Purchase 100 shares of a stock • The cost of the stock is normally $100 a share. • With a loan from a stockbroker I will only pay $5 for a share of stock. • I have now bought 10,000 dollars worth of stock for 500 dollars • Speculation • After I buy that stock, I hope that the cost of a share will rise from 100 to 200 dollars • The overall value of 100 shares of this is now 20,000 • You will now repay $9,500 and make 10,500 for yourself

  19. Unprofitable Same Stock • Stock that you purchased goes from %100 to $50 • After the decline in price, your shares are worth 5,000 • The overall value of 100 shares of this is now 5,000 • You have now owe the bank 9,500 you don’t have

  20. Stock Market Crash

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