Chapter15US - Chapter 15 Crash and Depression 1929-1933 Section 1 The Economy in the Late 1920s-1925 Stock market soared-Workers wages had risen

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Sheet1 Page 1 Chapter 15: Crash and Depression, 1929-1933 Section 1: The Economy in the Late 1920s -1925, Stock market soared. -Workers' wages had risen since 1914. -Unemployment average below 4%. -Organized labor lost members. -In order to keep unions weak, companies launched strategies to meet some of the workers' needs without demands. -Known as WELFARE CAPITALISM. --Raised wages, paid vacations, English classes. Uneven Prosperity -1929, 200 large companies controlled 49% of American Industry. -Just 0.1% of the population held 34% of the country's total savings. -71% earned less than $2,500. -80% had no savings. Buying on Credit -People begin to purchase items on credit even if they could not afford it. -Personal debt rose. -The Installment plan made expensive items irresistible. Playing the Stock Market. -SPECULATION, the practice of making high-risk investments in hops of getting a high gain. -BUYING ON MARGIN, allowed investors to purchase a stock for only a fraction of its price and borrow the rest. --Brokers charged high interest rates and could demand payment of the loan at any time. Over Supply, Low Demand -People could not afford to buy goods as fast as the assembly lines turned them out. -Overproduction causes industry to slow down. -EXAMPLE: Automobile production! -Slows down produciton.
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This note was uploaded on 05/13/2010 for the course USH US History taught by Professor Mize during the Spring '10 term at West Point.

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Chapter15US - Chapter 15 Crash and Depression 1929-1933 Section 1 The Economy in the Late 1920s-1925 Stock market soared-Workers wages had risen

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