Bellringer
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The Harlem Renaissance was
• A rebirth of negro spirituals
• A rebuilding of New York buildings
• An African American cultural
movement
• A movement of African Americans
from the South to Harlem
What was the name given to New York
City’s song writers during the 1920s,
including Irving Berlin?
• Tin Pan Alley
• Renaissance
• Flappers
• Harlem Renaissance
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Who was a writer who became a leading
voice of the African American experience
in the 1920s?
• Bessie Smith
• Langston Hughes
• Louis Armstrong
• Duke Ellington
How did radio change the lives of
Americans in the 1920s?
• People were able to listen to up-todate news daily
• Music became popular
• Commercials helped people to know
what businesses were in surrounding
communities
• Many people entered the
entertainment business in the 1920s
due to the invention of radio
Causes of the Great Depression
Causes of the Great Depression
• Farmers’ crisis/ Over production -surplus of
goods, falling prices
• Lower Wages
• Under consumption -b/c people were in debt
• Credit buying- too much access to easy money
• Tariffs -stopped foreign goods from coming into
the U.S., but also slowed down foreign trade
(exports out of the US)
Were the 1920s really “roaring?”
• Buying on Credit
• People wanted to live the “good life,” which
meant indulging themselves with the hottest
commodities (i.e. the automobile)
• In order to afford these items, people bought
them on credit- pay a little now, and pay the
rest back later with a low interest rate
• Effect: People had a FALSE
sense of prosperity
Stock Market Speculation
• Stocks give the owner the ability to share in the
profits if a company does well, or suffer losses if a
company does poorly
• During the 1920s, the stock market was described as
a bull market- in which prices steadily rose (so if you
invested, you were sure you were going to make $$)
Were the 1920s really “roaring?”
• Over-speculation of stock market
• The stock market seemed like such an easy way to
make money
• That is when OVER-speculation occurred. Everyone
bought stocks at low prices, even if they could not
afford the low prices
• Stock prices did NOT reflect the true success of the
business
• You could take out a loan to buy stock (MARGIN!)
• People who bought stocks on margin risked losing a
lot of money (that they didn’t have) if the prices of
stocks went down.
Underconsumption
• Few consumers had the money to purchase goods
• Under-consumption led to lower prices which
resulted in the loss of money for farmers and
manufacturers
Overproduction
Farmers Overproduce:
-The wide spread switch from horse-drawn to
mechanized farm equipment allowed farmers to
increase their production of crops
-Overproduction led to major price reductions, causing
farmers to lose money and the ability to pay back
farm loans
Scenario
• You are a farmer; the year is 1927. You are bitter because
your family has not shared in the urban prosperity that you
have been hearing about. Your expenses for farm
machinery are increasing at the same time agricultural
prices (and your income) are dropping. You have watched
the value of stocks continue to increase. You not only want
to be able to feed your family, but you want to be wealthy
enough to buy a car one day. If you buy a stock that rises in
price, you may be able to accomplish all of these goals. You
have heard about the successes of the radio maker, RCA
and you want to invest, however, you cannot afford the full
price of the stock. What will you do?
Scenario (Cont)
• You buy 5 shares of RCA. You took out a loan
from a local bank, and each share should cost
you $10. But, since you are paying on margin,
you only have to pay $10 immediately, and you
will owe the bank $40. You run to make your
purchase, and you continue to check the value of
your stock.
• A week later, each share of RCA is valued at $12.
• The stock continues to rise, and you almost made
back the original money that you had borrowed
(you still owed interest), and the price of RCA
dropped slightly. What will you do?
Scenario (Cont)
• Good for you if you held on, the price of RCA is up to $50 a
share! You felt relieved! Maybe you would be able to afford
that car by 1929.
• Then, in September of 1929, prices began to fall again.
You figured the prices would again rise, so you held on to
your stock.
• On Thursday October 24th, your stock took a huge plunge.
It went from $35 dollars a share to $18 dollars a share (in
one day!). You don’t know what to do. You begin to panic,
but you still hold on.
• The next day, your stock dropped even further, to $11.
What will you do?
The Stock Market Crash of 1929
• October 24th- Black Thursday, when stock prices
plunged and people panicked and pulled out their
investments (sold their shares)
• Oct. 29th- Black Tuesday- when the “bottom fell out
of the market”- prices dropped to an all time low
• As the prices dropped, people panicked and
continued to sell, causing the prices to drop even
further
• People who bought stock on margin could not pay
back the investors
Stock Market Crash
• Banks who had loaned all of the money to buy on
margin could not get their money back
• This resulted in bank failures
• While the crash of the stock market was NOT the
only cause of the Great Depression, it was a major
blow to the economy, and it made it impossible for
the American and world economy to revive itself