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Henry Ford Installs the First Assembly Line
-- Prosperity
Reduces time to build a car from 12 hours to 2 1/2 hours.The assembly line helped Ford produce cars more efficiently and inexpensively. This helped other factories become more efficient and inexpensive too, which lead to an increase in productivity and helped boost the economy. -
Wall Street Stock Market Crash
-- End of Prosperity, start of Recession
-- Also known as Black Thursday
Stocks were doing so well that everyone started to take out money to buy more stocks, but this made them vulnerable to changes. People got so invested and confident in their stocks that they started selling and buying them at prices that were higher than what they were worth becasue they thought that would be what they would gain.
When companies posted dissapointing results, people cashed in their stocks and prices began to -
Wall Street Stock Market Crash Cont.
fall rapidly. Some companies tried to invest in stocks to raise the prices again, but everyones attitude toward stocks was on the verge of panic.
Prices fell a total of $40 million that day. -
Period: to
Great Depression
-- Depression
Thousands of people were homeless, while hundreds of thousands of people were in poverty, The average American income dropped 40% from 1929. The stock market didnt fully return to predepression levels until 1954. -
Congress Passes the Emergency Banking Act
-- Depression
President Roosevelt tried to spread confidence in America's banking system after the collapse in the stock market. Because of the collapse people were taking their money out of banks and keeping it at home.
Roosevelt shut down all banks for four days after his inaugeration while he passed the law. During this time banks were checked to make sure they were financially secure. This was done to prove to people that banks were safe for their money so they would use them again.
After -
Congress Passes the Emergency Banking Act Cont.
banks were reopened, people lined up to put their money back into banks. This also helped to boost their confidence in Wall Street. The stock market recorded its largest one day percentage price increase. -
John Maynard Keynes publishes his book
-- Depression
John Maynard Keyes published his book, The General Theory of Employment, Interest, and Money.
In it he states that people should not expect an economy to provide jobs after it falls.
His theory founded "neoclassical synthesis" and "Keynesian economics", and helped to form todays macroeconomics. -
World War II Starts
-- Start of Recovery
With most of Europe at war, the countries fighting needed a supplyer for their troops to get weapons, ammunition, food, and clothing. This task was given largly to the US. The US started to produce more than it ever had and the economy rose with the challenge. -
US joins World War II
-- Recovery
The Japanese bombed Pearl Harbor Dec 7, 1941. By this time most of Europe had already been at war for 2 years and the US' economy has skyrocketed. The US joins the war and needs more laborers to work in the factories, so women begin to be accepted in the work force. This gives manufacturers a bigger work force to be able to produce more in a faster amount of time. -
Bretton Woods Conference
-- Start of Prosperity
World leaders met to decide the currency rate when the rate between foreign money was unbalanced. This was able to save many people money and to help with confusing disagreements.
