OBJS

1
Ch 23.1 The Great DepressionProsperity Shattered

• OBJS
• Explain why many americans invested in the Stock
  market of the 1920s.
• Explain why the stock market crashed in Oct. of
  1929.
• Discuss the Factors that gave rise to the great
  depression.

2
Bellringer

• What were the symptoms that the economy was
  sick during the 1920s? Are any of these
  symptoms present in todays economy?

3
Intro

• Why do people buy stocks? Is there a danger
  involved?

4
Get Rich Quick!

• Bull Market (rising prices) prompted stock
  speculation (buying and selling quickly)
• Margin Buying purchasing stocks with borrowed
  money
• Dangerous!

5
The Stock Market Crashes!

• Oct. 24th, 1929 Black Thursday - Rising
  interest rates made investors nervous many
  large ones dumped their stocks causing prices to
  fall
• Prices continued to drop during the following
  week
• Oct. 29th, 1929 Black Tuesday 16 million
  shares dumped in 1 day
• Brokers called in loans (in cash)
• More stocks dumped
• Huge losses (30 billion)

6
Depression Begins

• Gross National Product falls
• 1929 - 103 billion
• 1933 - 56 billion
• Ave. income halved
• Factories shut down
• Banks failed (5,000 between 1930-1932)

7
Causes of the Great Depression

• Economic Issues of the 1920s
• Widening INCOME GAP between rich and poor
• Wealth concentrated in the hands of a few
• Farmers falling prices
• Poor lacked true buying power
• Credit
• High Tariffs
• Part of the BUSINESS CYCLE
• Normal ups (growth) and downs (constrictions) of
  the economy