the nation’s sick economy
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The Nation’s Sick Economy. Economic Troubles. Industries in trouble Railroad, textiles, steel Mining and lumbering Automobile Consumer goods Housing . Farming Agriculture suffered the most Coolidge vetoed the bill enabling price-supports - PowerPoint PPT PresentationTRANSCRIPT
The Nation’s Sick Economy
Economic TroublesO Industries in
troubleO Railroad,
textiles, steelO Mining and
lumberingO AutomobileO Consumer goodsO Housing
O FarmingO Agriculture
suffered the most
O Coolidge vetoed the bill enabling price-supportsO Gov’t buying of
surplus crops that they would sell on the world market
Economic TroublesO By the late 1920s, Americans were
buying lessO Rising pricesO Stagnant wages Unbalanced distribution of income
O Rich got richer / poor got poorerO The wealthiest 1% of the population rose by
75% / only 9% increase for the majority of Americans
O Overbuying on credit
Economic TroublesO Unrestrained buying and
selling O The Stock Market
O The buying and selling of company stocks
O Dow Jones Industrial Average
O A measure based on the stock prices of 30 representative large firms
O Many people invested in the 1920s but engaged in
O SpeculationO Buying on the margin
The Stock Market Crashes
O Black TuesdayO Stock prices plungedO Shareholders tried to sell
out before the prices fell even lower
O 16.4 million stocks were sold
O Many people who bought stocks on credit found themselves in huge debt
O Many people lost their savings
Financial Collapse O Bank and business failures
O BanksO After the crash, panic caused people to
withdraw their money from the banksO By 1933, 11,000 of the nations 25,000 banks
had failedO Because bank accounts weren’t insured,
millions of people lost their savingsO Businesses
O 90,000 businesses went bankruptO GDP cut in ½O Millions lost their jobs
Crisis at Home and Abroad
O 1930 – Congress passed the Hawley – Smoot Tariff ActO Highest protective tariff in US
historyOMeant to protect American
farmers and manufacturers but backfired O Many countries retaliated by
raising their own tariffs O Within a few years, world trade
fell by more than 40%