the great depression the economy in the late 1920’s
TRANSCRIPT
The Great Depression
The Economy in the Late 1920’s
The Economy Appears Healthy
Wonderful Prosperity
The value of stock continued to rise from 1925 to 1929
Wages had risen 40% since 1914
Only 4% Unemployment (7.9% 01/13)
Employment Changes
Labor unions lost support during the 20’s due to higher wages and standard of living
Employers raised wages, gave paid vacations and provided health care
Economic Danger Signs
1. Uneven Prosperity
71% of people earned less than $2500 a year & had no savings
200 companies controlled 49% of American industry
2. Buying on Credit
Poor Americans accumulated personal debt
3. Playing the Stock Market
Widespread Speculation (high risk investments in hopes of financial gain)
Investors produced 10-15% of the stock price & borrowed the rest at very high interest rates (buying on margin)
4. Too Many Goods, Too Little Demand
Overproduction! Assembly lines outpaced the public demand
5. Slump in Key Industries
Drop in demand caused layoffs (auto, steel, rubber, glass industries)
6. Trouble for Farmers
Value of agriculture goods dropped after WWI - farmers could not repay loans taken during WWI
6000 rural banks were forced to close