1 / 11

American History Chapter 21-1

American History Chapter 21-1. The Great Crash. Beware of Appearances. 1920s were a period of impressive economic growth. Gross National Product : Value of goods & services produced during a specific period of time. Rose by 30%. The automobile industry drove the growing economy.

cassia
Download Presentation

American History Chapter 21-1

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. American History Chapter 21-1 The Great Crash

  2. Beware of Appearances • 1920s were a period of impressive economic growth. • Gross National Product: Value of goods & services produced during a specific period of time. • Rose by 30%. • The automobile industry drove the growing economy. • Two groups that did not do well in the 1920s: • Farmers and Unions • Stock market boomed.

  3. Election of 1928 • Rep. Herbert Hoover v. Dem. Alfred Smith. • Hoover won easily.

  4. Signs of Economic Weakness • Unequal distribution of wealth: The wealthy enjoyed most of the prosperity.

  5. More Warning Signs • Buying on margin: Risky practice of buying stock on credit. Example? • Stock brokers could demand their money back if the stock falls below a certain price. • Federal Reserve System: The nation’s central bank. • Tried to slow buying on margin by raising interest on loans. • Didn’t work as corporations began loaning money. • Car sales began to decrease.

  6. Stock Market Crash • Thursday, Oct. 24, 1929: A huge sell-off of stocks took place. • Caused stock prices to plunge. • Leading bankers joined to buy stocks to stop the plunge. • Tuesday, Oct. 29,1929: Black Tuesday • Investors panicked, dumping millions of stocks. • The stock market dropped in value by $16 billion.

  7. Effects of the Stock Market Crash • President Hoover downplayed it: Saying the economy would bounce back quickly. • Many investors lost everything. • Triggered a banking crisis: • Panicked customers rushed to withdraw their money. • Many banks had invested in the stock market. • Had made loans to stockbrokers. • Many banks had to go out of business.

  8. More Effects • Businesses suffered: • No money available for growth. • Americans began buying only essential items. • Had to lay off workers. • Effects Overseas: • Fragile European economies took a step backwards. • American banks wanted their loans back. • Couldn’t export as many goods to the U.S. • Tried to protect themselves with high tariffs.

  9. Now how did they manage that?

More Related