1. Consumer Economy

2. Farmer´s problems
• An agricultural depression in early
1920's contributed to this urban
migration
• U.S. farmers lost agricultural
markets in postwar Europe
• At same time agriculture efficiency
increased so more food produced
(more food = lower prices) and
fewer labourers needed
• So farming was no longer as
prosperous, and bankers called in
their loans (farms repossessed)
• So American farmers enter the
Depression in advance of the rest
of society.

3. Overproduction
They have By August 1929
more cars the factories
to sell than had to lay off
customers thousands of
workers
to buy
Demand
They decided to
decrease every
sell the shares
day
Less demand ,
less production ,
more
unemployment

4. Speculation
1-This encouraged STOCK
SPECULATION - people would buy
and sell stocks quickly to make a
quick buck.
2- All this buying & selling, stock
value increased (Ex: G.E stock $130
 $396/share)
3-This quick turnover didn't aid
because they needed long term
investments so they could pay bills
(stock value was like an illusion)
4-Unscrupulous traders would buy
and sell shares intentionally to
inflate a given company's stock
value and all of this gave a false
sense of security/confidence in the
American market

5. CH. 24 – CRASH, DEPRESSION, AND NEW DEAL
• 1920's had been a period of good economic times
• Tues. Oct. 29th, 1929 - NYC Stock market crashed,
causing a depression that would last until 1942

6. The crash is beginning
 Beginning in Oct. 1929,
investors’ confidence
dropped, leading to a
market collapse
 All tried to sell at once
and bottom fell out of
market = panic
selling… (many
bankruptcies as banks
called in loans)
 Only a tiny minority of
people traded on the
stock exchange, but
they possessed vast
wealth, and the crash
had a ripple effect on
the economy

7. Consequences
Many American
companies go
Prices bust
fall ,
crisis
USA is poor Unemployment
because of wall risen rapidly in
street crash USA
USA government
introduce s tariffs
Other countries
to protect US
become poorer
companies from
cheap imports

8. Solution ; New deal, Why
• 1. The companies were re-released to
enterprises in difficulty with support
• 2-Public companies were created in
sectors where there wasn´t investment
in private companies
• 3-The destruction of agricultural stocks
to rise the prices
• 4-The State established a control of
the banks forcing them to facilitate
loans.
• 5-The State stimulated the economy
with a great public works construction
plan
• 6- It promoted a policy of support,
subsidizing agricultural prices, increasing
wages and reducing the work week to 40
hours of labour