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The Nation’s Sick Economy

The Nation’s Sick Economy. Chapter 22 Section 1. Terms & Names. price support Alfred E. Smith credit Black Tuesday speculation Great Depression buying on margin Dow Jones Industrial Average Hawley – Smoot Tariff Act. Causes of the Great Depression. Industry

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The Nation’s Sick Economy

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  1. The Nation’s Sick Economy Chapter 22 Section 1

  2. Terms & Names price support Alfred E. Smith credit Black Tuesday speculation Great Depression buying on margin Dow Jones Industrial Average Hawley – Smoot Tariff Act

  3. Causes of the Great Depression Industry Some industries were less competitive

  4. Causes of the Great Depression Farming Farmers produced more than they could sell

  5. Causes of the Great Depression Easy Credit Many people went into debt buying goods on the installment plan

  6. Causes of the Great Depression Income The rich got richer while the poor got poorer

  7. A New President The Election of 1928 Democrats Republicans Alfred E. Smith Herbert Hoover Governor of New York Sec. of Commerce Witty / Outgoing Formal / Reserved

  8. Hoover Wins! Americans trusted the Republicans to continue prosperity

  9. Risky Business Many Americans practiced speculation & buying on margin Speculation – very risky Buying on margin – only paying for part of the stock

  10. Stock Market Crashes October 29, 1929 Stock prices dropped Investors started selling all their stocks Wall Street lost $30 billion in one month

  11. Financial Collapse Many Americans lost EVERYTHING in the crash

  12. After the Crash • Americans panicked and tried to withdraw their money from the bank • The banks ran out of money and closed • People lost their savings

  13. 85,000 businesses went bankrupt • 1 out of every 4 people were unemployed • People who kept their jobs had cut hours and less wages

  14. Hawley – Smoot Tariff Act • Highest tariff in US History • Designed to protect farmers and manufacturers from foreign competition

  15. Backfired – foreign countries couldn’t afford to buy American goods

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