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Unformatted text preview: Next we talked about Al Capone…he had control over the majority of the alcohol in the United States. He organized a fleet of rafts to go out at night up to Ontario and get alcohol to smuggle back. He mentioned Henry Ford again, explaining that he was anti-Semitic and required employees to read a special newspaper called Dearborn, printed by him. It was full of propaganda and questionable ideals. Ford himself was illiterate. But back to our consumer culture… People began to buy beyond their means! • Credit system comes into play, with interest payments and all that • People also invest in stocks, buy shares of companies o They rely on these stocks making money for them to pay off their debt in the future! • Holding companies also emerge, which are companies that do not produce anything physical, but are merely overseers of other companies o Standard oil is a good example of this – it just made sure all the aspects/sub- companies in the oil business were running smoothly o This creates a problem – artificial companies, reliant on the success of their sub- companies for existence • But people want to buy things at this time, so tons of them rush out and buy stocks, and the stocks go up • At the end of the 1920s, though, stocks begin to fail (only a little bit) and people freak out, because they are depending on these stocks to keep them out of debt later on • Everyone decides to sell all their stocks! • Stock brokers are put under a ton of pressure – all their clients are coming to them demanding the money their stocks are worth, immediately • Stock brokers go to the banks and withdraw money to pay their clients o Keep in mind, this is not just a few, this a the VAST MAJORITY of ALL stock brokers doing this at the SAME TIME • But banks don’t keep that much money on their premises, they give out loans (to other countries, like Germany at this time), so they ran out of money • No one could access any money they had saved in the bank – everyone is screwed As if that wasn’t enough of a crisis for the US… • This occurs during a severe drought in the United States’ Midwest • Farmers are affected by the bank crisis as well o They also buy on credit (seeds, tools, tractors, etc) and expect their crop yield to pay off their dues in the future • And they have their own crisis o John Deere had begun selling tractors worldwide, so the world crop output increases dramatically!...
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This note was uploaded on 04/07/2008 for the course GHIST 225 taught by Professor H.gelfand during the Spring '08 term at James Madison University.
- Spring '08
- The Grapes of Wrath