1929-1939
• the economic boom of the 1920s caused problems
an economic BUST in the 1930 and changed
people’s the attitudes about the role of government
in controlling the economy
Great Depression = economic hardship
during the 1930s with high unemployment
and poverty (very poor)
1. The Business Cycle - The economy naturally
goes through times of recession, recovery, and
prosperity.
2. The Stock Market
• The stock market is a place where stocks and
bonds are "traded" – meaning bought and sold.
• Stock - units of ownership in a company.
Why would a company sell stock??
TOO MAKE MONEY!!!
The Stock Market
When you buy stock, you become a shareholder, which
means you now own a "part" of the company. If the company's
profits go up, you "share" in those profits. If the company's
profits fall, so does the price of your stock. If you sold your
stock on a day when the price of that stock falls below the
price you paid for it, you would lose money.
In the stock market, prices rise and fall every day. When you
invest in the stock market, you are hoping that over the years,
the stock will become much more valuable than the price you
paid for it.
OBJECTIVE: you will be able to identify the
main causes of the Great Depression.
1. The Stock Market
Crash of 1929
4. Banks Failed
2. Overproduction
5. Federal Reserve failed
to save failing banks
3. Over speculated on
Stocks
6. High Tariffs
BLACK TUESDAY
• On Oct. 24, 1929 the market
began to drop more than the
previous months and people
began to panic.
• By Tuesday Oct.29, 1929 the
prices plunged and stocks
became worthless.
• This became known as Black
Tuesday.
Black Tuesday – stock market lost $14 billon.
2. Overproduction - making too many goods and
farmers growing too much following WWI.
• Factories and farms were
producing more goods than
the people could afford to
buy.
• As a result, prices fell,
factories closed and workers
were laid off.
• Prices for farm products also
fell, as a result, farmers could
not pay off bank loans and
many lost their farms.
3. Overspeculation- buying too much on credit (even
stock – buying “stock on margin”).
• Banks loaned money to
people who invested in the
stock market.
• When the market crashed,
people could not pay their
loans and the banks could not
give depositors their money.
•As a result, many banks
closed down and many
families lost their life savings.
4. The Federal Reserve failed to
prevent the collapse of the banking
system
• Federal Reserve = the
central banking system in
the United States
• It helps banks the way
banks help people
“THE FED”
5. High Unemployment Rates
• Jobless became homeless
• Farming families migrated to look
for jobs
In one school, a teacher ordered a thin girl to go home to eat.
“I can't,” replied the girl. “This is my sister's day to eat.”
“I would take off my glasses so I would not see the bugs on
the food from the trash.”
• High tariffs discouraged
international trade
• Tariff = tax on imported goods
• intended to make imported
goods very expensive and
encourage people to buy
domestic products
During the Great Depression,
people learned how to
survive.
What do you think this is?
This is a coat made out a feed
sack. Many people
made curtains, clothes, table
clothes, etc. Not all feed sacks
were this drab. After a while
feed sacks where made with flowered
patterns so people could use the
material.
Check your
knowledge:
What were the
causes of the Great
Depression?
- WOW ME explain as many
as you can!!
How to Remember!
Blame HOOVER!
1. High Tariffs
2. Overproduction
3. Over speculation
4. Very many Banks failed
5. Economic Crash (Stock Market)
6. Federal Reserve Failed
• Distant cousin of Theodore Roosevelt
• He married his 5th cousin, Eleanor Roosevelt
• Suffered from polio in 1921 (wheel chair)
• Very few pictures showed him in a wheel chair
• 32nd President of the
USA (1933-1945)
• Beat Herbert Hoover in
election by a landslide
• People wanted help
and relief from the
government
• FDR promised relief,
recovery, and reform
R
R-R-R
elief - give help immediately to jobless workers
who were in need.
R ecovery - give help to banks, businesses, farmers,
and workers to recover from the Great
Depression.
R eform – make long-term changes in the
economy so that a depression would never
happen again.
• Roosevelt’s plan to help the economy.
• The New Deal was made up of a series of
programs to help the nation recover.
“Fireside Chats”
• a series of 31 radio broadcast
messages from FDR
• FDR explained issues about
the economy in simple
language (like the bank crisis),
his plans for a “New Deal”, and
asked Americans “tell me your
troubles”.
Click the picture to listen
• As a result, many wrote FDR
letters about their troubles
• Though FDR’s plan began moving the country
out of the Depression, by 1937 the country
was back in an economic recession
• It was not until our involvement in WWII that
the country was completely out of the Great
Depression.
• Many New Deal programs like TVA, Social
Security, and FDIC still exist today