From Prosperity to Depression
"The nation is marching along a permanently high
plateau of prosperity."
-Yale University economist Irving Fisher, 1929
Questions for the day…
1. Why were Americans so confident in the stock
market in the years leading up to the Great
2. How did the Psychology of Consumption shape
the causes and effects of the Crash?
3. How did stock market investing change during
the 1920s? Who were the main investors and
how did they pay for their investments?
4. Explain the statement: "By 1929, much of the
money that was invested in the stock market
did not actually exist.“
5. Why did Hoover choose the term "depression"
for this economic downturn? Why do you think
this term has remained part of the American
vocabulary ever since?
Optimism and Prosperity
"We in America
today are nearer to
the final triumph
over poverty than
ever before in the
history of any land.
The poorhouse is
"It has been twelve months of unprecedented
advance, of wonderful prosperity. If there is
any way of judging the future by the past, this
new year will be one of felicitation and
-New York Times Jan 1st 1929
A "Bull Market"
Reasons to Invest in the
1. Rising stock dividends.
2. Increase in personal
3. Relatively easy money
4. Companies invested their
over-production profits in
5. Lack of stock market
6. Psychology of consumption.
Stock prices out of proportion to actual profits
Black Thursday October 24th 1929
Black Tuesday October 29th 1929
October 29th-Nov 13th $30 billion disappeared from
the American economy
"Panic of 1873" and
the "Panic of 1893.“
Break down of families
High school dropouts
Images of the Depression
Riding the Rails
Two Basic Facts of the Depression:
"Now let's be frank. You and I know that immediate
relief of the unemployed is the immediate need of
-Franklin D. Roosevelt, inaugural address
2. Inability to sell goods and services.
"We're the first nation in the history of the
world to go to the poorhouse in an
-Humorist Will Rogers
Laying the Blame