Agenda 3/9/10
• Go over time line
• Go over 9.1 Study Guide/ lecture notes
• 9.2 Outline
Timeline
• Oct 1929 – The stock Market Crashes
• Nov. 1929 – An estimated $30 billion in
stock values are gone
• March 1930 – 3.2 million Americans
unemployed
• Nov. 1930 – The unemployed take to the
streets of NY, selling apples
• Jan 1931 – Food riots break out
Timeline
• March 1931 – 3,000 unemployed workers
march on the Ford plant
• Dec. 1931- The NY Bank of the US
collapses
• Jan 1932- Congress establishes the RFC
• July 1932 – The RFC is authorized to lend
money to states from the National
Treasury
• Nov. 1932 – FDR elected by a landslide
9.1 Study Guide
1. When Calvin Coolidge decided not to run
in 1928, he cleared the way for Herbert
Hoover to head the Republican ticket.
2. The Democrats chose Alfred E. Smith ,
an Irish American from New York’s
Lower East Side, and the first ever
Roman Catholic nominated for president.
3. Prohibition was a major issue in the 1928
elections
9.1 Study Guide
4. Many Protestants were willing to believe
that the Catholic Church financed the
Democratic Party and would rule the
United States if Smith were elected.
5. Because of the bull market, by 1929
about 3 million Americans , or roughly 10
percent of households, owned stocks.
9.1 Study Guide
6. Many investors bought stocks on margin ,
meaning they made only a small cash
down payment with the rest coming as a
loan from a stockbroker.
Example of buying on Margin
• $10,000 worth of stock only cost an investor
$1,000. The other $9,000 was a loan from the
stockbroker.
• The stockbroker earned commission on the sale
and interest on the loan
• When the stock market was strong it didn’t take
long for the $10,000 worth of stocks to rise to
$11,000 or more
• The investor could then sell the stock, pay off
the loan and still make $1,000
9.1 Study Guide
7. A problem arose if the stock began to fall
in price, causing the broker to issue a
margin call, demanding the investor repay
the loan at once.
9.1 Study Guide
8. The stock market slide was not the major
cause of the Great Depression, but it
undermined the economy’s ability to hold
out against its other weaknesses.
Copy into Additional Notes
9. Another way the crash weakened the
banks was that many banks themselves
had taken depositors’ money and invested
it in the stock market , hoping for higher
returns than they could get by using the
money for conventional loans.
9.1 Study Guide
10.A bank run takes place when many
depositors decide to withdraw their money
at one time, usually for fear the bank is
going to collapse.
11. Most economists agree that
overproduction was a key cause of the
Depression.
Cyclical Effect of Overproduction
Copy into
Additional
Notes
12. Many people who had bought high-cost
items such as refrigerators on the
installment plan reached a point where
paying off their debts forced them to
reduce other purchases.
9.1 Study Guide
13. When sales of goods slowed,
manufacturers cut production and laid off
employees .
14. The Hawley-Smoot Tariff raised the tax
on many imports to the highest level in
American history, and reduced American
sales abroad.
In Summary…
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•
•
•
Copy into Additional Notes
In an election marked by religious prejudice and
the issue of prohibition, Herbert Hoover won the
presidency by a landslide.
The long period of rising stock prices led many
people to risky investment practices
The October 1929 stock market crash led to
bank failures across the nation
An uneven distribution of income, the lack of
foreign markets for export and the Federal
Reserve’s mistakes contributed to the Great
Depression.
Great Depression Begins –
Summary Assignment
• Complete the assignment on you OWN
sheet of paper. (Below your 9.1 additional
notes)
• Set up your paper exactly like the graphic
organizer on the sheet.
• Yes, you need to do the Critical Thinking!
• This assignment goes in your NOTES
section.