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Causes of the Crash
Chapter 11
1. โ€œRoaring 20sโ€
โ€ข A. very prosperous
โ€ข B. car & radio are big industries
โ€ข 1. Fordโ€™s assembly line revolutionary
โ€ข 2. between 1908-1917 50% of 15
million cars are Fordโ€™s
โ€ข C. US losses in WWI minimal
โ€ข 1. call in loans to Europe
โ€ข D. innovative
โ€ข 1. shopping malls
โ€ข 2. 1st fast-food chain, A&W Root Beer
โ€ข 3. billboards & mass marketing, celebrity
endorsements
โ€ข E. โ€œconsumer economyโ€-a money system that
depends on people
โ€ข spending lots of money
โ€ข F. electricity more widespread
โ€ข 1. 63% of all homes wired for power by
1925
โ€ข G. CREDIT introduced
โ€ข 1. buy needs with no money up front
โ€ข 2. By 1929:
โ€ข a. 60% of cars
โ€ข b. 70% of furniture
โ€ข c. 80% of most electronics
โ€ข d. 90% of washing machines
โ€ข H. Laissez-Faire government
โ€ข 1. no intervention or restrictions
โ€ข 2. business soared in US
โ€ข I. Problems:
โ€ข 1. HUGE gap between rich and poor
โ€ข 2. prosperous times means business
expand
โ€ข 3. debts and loans
2. The Economy
โ€ข A. โ€œWonderful Prosperityโ€
โ€ข 1. Market value of all stocks was over
$27
billion
โ€ข 2. 1928 year stocks rise $11 billion alone
โ€ข B. Warning signs
โ€ข 1. debt
โ€ข 2. gap of wealth
โ€ข 3. stock market players
โ€ข 4. overproduction in factories and farms
3. The Crash
โ€ข A. September 1929 stocks peak at 381, then stocks
begin to slide down
โ€ข 1. people ignore, stay optimistic
โ€ข 2. banks begin to call in loans
โ€ข 3. Oct. 23, 1929 Dow Jones falls 21 points in
one hour
โ€ข 4. Oct. 24, 1929 investors begin to sell,
sinking
stock prices
โ€ข 5. a few bankers try to stop the slide, buy stocks
โ€ข a. stabilizes market for a weekend
โ€ข B. Black Tuesday- Oct. 29, 1929 โ€œGREAT CRASHโ€
โ€ข 1. Investors everywhere sell off stocks
โ€ข a. 16.4 million shares sold in one day
โ€ข 2. brokers had no one wanting to buy stock
โ€ข 3. prices continue to fall
โ€ข a. by Nov 13, Dow at 198
โ€ข b. total losses over $30 billion
โ€ข c. Effects of the Crash
โ€ข 1. banks
โ€ข a. businesses & people bankrupt- no loan
repayment
โ€ข b. bank runs-people taking $ out RIGHT NOW
โ€ข c. bank failures
โ€ข d. savings wiped out-$9 million accounts
vanished
โ€ข e. unemployment grows
โ€ข 2. Workers and farmers
โ€ข a. too much crop, no one buying
โ€ข b. no work, lay-offs
โ€ข 3. worldwide
โ€ข a. other economies rely on ours,
were ruined
4. Americans
โ€ข a. no money, no job
โ€ข b. Depression
4. Causes of the Depression
โ€ข A. Unstable Economy
โ€ข B. Too much credit use in stocks and
economy
โ€ข C. No monetary policy--$$ simply
disappears

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Causes of the crash fillins

  • 1. Causes of the Crash Chapter 11
  • 2. 1. โ€œRoaring 20sโ€ โ€ข A. very prosperous โ€ข B. car & radio are big industries โ€ข 1. Fordโ€™s assembly line revolutionary โ€ข 2. between 1908-1917 50% of 15 million cars are Fordโ€™s โ€ข C. US losses in WWI minimal โ€ข 1. call in loans to Europe
  • 3. โ€ข D. innovative โ€ข 1. shopping malls โ€ข 2. 1st fast-food chain, A&W Root Beer โ€ข 3. billboards & mass marketing, celebrity endorsements โ€ข E. โ€œconsumer economyโ€-a money system that depends on people โ€ข spending lots of money โ€ข F. electricity more widespread โ€ข 1. 63% of all homes wired for power by 1925
  • 4. โ€ข G. CREDIT introduced โ€ข 1. buy needs with no money up front โ€ข 2. By 1929: โ€ข a. 60% of cars โ€ข b. 70% of furniture โ€ข c. 80% of most electronics โ€ข d. 90% of washing machines
  • 5. โ€ข H. Laissez-Faire government โ€ข 1. no intervention or restrictions โ€ข 2. business soared in US โ€ข I. Problems: โ€ข 1. HUGE gap between rich and poor โ€ข 2. prosperous times means business expand โ€ข 3. debts and loans
  • 6. 2. The Economy โ€ข A. โ€œWonderful Prosperityโ€ โ€ข 1. Market value of all stocks was over $27 billion โ€ข 2. 1928 year stocks rise $11 billion alone โ€ข B. Warning signs โ€ข 1. debt โ€ข 2. gap of wealth โ€ข 3. stock market players โ€ข 4. overproduction in factories and farms
  • 7. 3. The Crash โ€ข A. September 1929 stocks peak at 381, then stocks begin to slide down โ€ข 1. people ignore, stay optimistic โ€ข 2. banks begin to call in loans โ€ข 3. Oct. 23, 1929 Dow Jones falls 21 points in one hour โ€ข 4. Oct. 24, 1929 investors begin to sell, sinking stock prices โ€ข 5. a few bankers try to stop the slide, buy stocks โ€ข a. stabilizes market for a weekend
  • 8. โ€ข B. Black Tuesday- Oct. 29, 1929 โ€œGREAT CRASHโ€ โ€ข 1. Investors everywhere sell off stocks โ€ข a. 16.4 million shares sold in one day โ€ข 2. brokers had no one wanting to buy stock โ€ข 3. prices continue to fall โ€ข a. by Nov 13, Dow at 198 โ€ข b. total losses over $30 billion
  • 9. โ€ข c. Effects of the Crash โ€ข 1. banks โ€ข a. businesses & people bankrupt- no loan repayment โ€ข b. bank runs-people taking $ out RIGHT NOW โ€ข c. bank failures โ€ข d. savings wiped out-$9 million accounts vanished โ€ข e. unemployment grows โ€ข 2. Workers and farmers โ€ข a. too much crop, no one buying โ€ข b. no work, lay-offs
  • 10. โ€ข 3. worldwide โ€ข a. other economies rely on ours, were ruined 4. Americans โ€ข a. no money, no job โ€ข b. Depression
  • 11. 4. Causes of the Depression โ€ข A. Unstable Economy โ€ข B. Too much credit use in stocks and economy โ€ข C. No monetary policy--$$ simply disappears