1920sWe’ve looked at the interesting, now how do

we get to the cause of the depression?

I can understand the CRASH of the 20s

• Listen to the song “Blue Skies” by Irving Berlin. Respond to the following questions in your

• Learning Target: I can understand “The Crash”.

Opener:• 1) What is the mood of this song?• 2) Think about what we havelearned about the 1920s up tothis point. How does this songreflect the attitude of theaverage American during the1920s?

“Blue Skies”Music and Words by Irving BerlinBlue skies smilin’ at meNothin’ but blue skies do I seeBluebirds singin’ a songNothin’ but bluebirds all day long.Never saw the sun shinin’ so brightNever saw things goin’ so rightNoticing the days hurrying byWhen you’re in love, my how they fly.Blue days, all of them goneNothin’ but blue skies from now on(Blue skies smilin’ at meNothin’ but blue skies do I see.)Never saw the sun shinin’ so brightNever saw things goin’ so rightNoticing the days hurrying byWhen you’re in love, my how they flyBlue days, all of them goneNothin’ but blue skies from now onNothin’ but blue skies from now on.

I can understand the CRASH of the 20s

AMERICAN INDUSTRIES DURING THE 1920S

• Farmers: For farmers the 1920s was a tough decade– Loans for land from WWI– war ended- could not pay loans– Forclosure of farms

• Railroad, textile, and steel– People invested money in other things

I can understand the CRASH of the 20s

I can understand the CRASH of the 20s

AMERICAN INDUSTRIES DURING THE 1920S

• Automobiles: • Growth in the car industry• Mass production of cars• assembly line• Increase in productivity

I can understand the CRASH of the 20s

I can understand the CRASH of the 20s

I can understand the CRASH of the 20s

OPTIMISM AND THE 1920S

• With the growing economy the expectation was for a great future!– optimism in the market

• Invested in the stock market

I can understand the CRASH of the 20s

OPTIMISM AND THE NEW YORK STOCK EXCHANGE

• American stock exchange boom of 1928-1929– Known as the “Bull Market”

• People made many investments to makequick profits (speculation )• Investors were buying on the margin• Businesses were booming and investments were

being made• This results in overspeculation– At the same time, excessive expansion of credit

I can understand the CRASH of the 20s

I can understand the CRASH of the 20s

A commonly used metaphor to describe this period of expansion is a “bubble”

What happens to bubbles?

I can understand the CRASH of the 20s

The Stock Market Crashes (THE BUBBLE BURSTS)

• When: October 29 “BLACK TUESDAY” 1929• 16,000,000 shares were traded• What Happened: Prices on the stock market

collapsed completely!!!!– people panicked and wanted “their” money– Went to banks to take money- NO money– People did not put any more money in the market-

market stopped

I can understand the CRASH of the 20s

What happened

I can understand the CRASH of the 20s

MAJOR CAUSES OF THE CRASH!Review

• Overspeculation – investments were being made on borrowed money, businesses aren’t really growing

• The expansion of credit• Buying on the margin• People were not saving their money

I can understand the CRASH of the 20s

THE STOCK MARKET CRASH IS GOING TO SIGNAL THE START OF THE GREAT DEPRESSION (1929-1940)

Closure: How was the end of the 1920s (The Crash) different than the beginning of the 20s (Roaring 20s)? Give 2 ways and explain them.

I can understand the CRASH of the 20s