text chapter 31.2. u.s. production and investment in the 1920s fueled the worlds economy by 1929...
TRANSCRIPT
Text Chapter 31.2
Financial Collapse and Depression
U.S. production
and investment
in the 1920’s
fueled the
world’s economy
By 1929
American
factories
produced ½ of
the world’s
industrial goods.
Fundamental Flaws of the U.S. EconomyUneven distribution
of wealth (60% of American families earned less than $2K per year).
Farm Overproduction: Better production methods and competition from non-U.S. farmers drive crop prices down.
Stock Speculation
U.S. Stock Market CrashesDespite econ.
problems, people continued to buy stocks on margin
September, 1929—Some savvy investors realize stocks are inflated and begin to sell
Panic! Market crashes by October, 1929
After the Crash:Unemployment rises
Production decreases
Wages Decline
Banks Close (taking investor’s money with them)
Businesses Fail
Farmers lose their land
U.S. Depression Spreads
Americans demand repayment of European loans
Further loans ceaseCongress places
tariffs on European goods, so demand for them declines.
Other nations respond by raising tariffs
World trade drops 65%
Result?