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Tuesday, Dec. 9Objective:
• SWBAT identify examples of the effects on popular culture from the emergence of a modern market economy
Agenda:• Class Registration• Stock Market Fails• Notes• Crash Course• What did you learn
in school
Warm UpGreen Desk: Gather Materials Orange Desk: RecorderPink Desk: Clean UpYellow Desk: Gather Handouts
1. What were two negative effects of the 18th Amendment?
2. What were two causes of the Stock Market Crash in 1929?
3. After analyzing the lives of the characters of the 20s, use one sentence (a thesis) that could be used to describe the decade?
Bonus: Yesterday (Dec. 7) was the 70th Anniversary of
what event?
How did we get to the crash…Year $ of the
Model T
1924 $950
1925 $440
1926 $440
1927 $355
1928 $295
The Model T was factor in the stock market crash.• Drastic decreases in
prices.• Over saturation of
goods.• The Credit System used
incorrectly.
Majority of families made less than necessary to support themselves
Over $
10,000
$5,000 - $10,000
$2,500 - $5,000
Poverty
Line
$2,000 - $2,500
$1,500 - $2,000
$1,000 - $1,500
Under $1,000
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Percentage of the Population Making Various Levels of Income in 1929
Family Income 1929
Families to the right of this line didn’t make enough for survival!
Increasingly unequal distribution of income
The top 1% received a 75% increase in their disposable income while the other 99% saw an average 9% increase in their disposable income.
80% of Americans had no savings at all.
Overproduction in industry and agriculture the “vicious cycle!”
Too much supply
wages not rising
Prices go down
Factories must cut
costs
Workers laid off
Lower disposable
income
Overextension of credit
People could not afford to pay for items they bought on the “installment plan”
Banks began to lose money
Farmers had their farms repossessed
US Protective tariffs
Foreign countries retaliated by increasing tariffs on American-made products
US companies had trouble selling their goods in other countries another reason for excess inventories
World trade slowed to a trickle
Trade
Dangerous investment practices by people and banks
Speculation( The process of selecting investments with higher risk in order to profit from an anticipated price movement)
“buying on margin”Shares of stock became over-valuedLack of federal government regulation of banks
and the stock marketBanks lost depositor’s money in the stock marketNet result Stock Market Crash and runs on
banks!
Causes of the Great Depression
Remember…the crash did NOT cause the Depression. It was a devastating event caused by speculation and lack of government regulation that made an already teetering economy that much worse.
Source: http://picsdigger.com/keyword/black%20tuesday%201929/