SSUSH17
Identify the causes and
consequences of the great
depression.
Vocabulary
• Shantytowns=public lands where
homeless people would set up tents and
shacks.
• Hoovervilles= nickname for shantytowns,
because people blamed Hoover for the
Depression.
Vocabulary
• Margin=paying a small percentage for a
stock now, with the promise to repay the
rest later. (Hopefully the stock would be
worth more when you went to sell it)
• Speculation=buying risky stocks in hopes
that the stock will continue to increase in
value and selling it quickly at a profit.
Vocabulary
• The great depression= the period of
American history from 1929-WWII.(known
for it’s low production and high
unemployment.)
Causes of the Great Depression
• Overproduction
• Under consumption
• Stock market crash
Overproduction and
under consumption
• People would max out their credit buying refrigerators,
cars, and houses.
• Soon they had to stop buying “extra” products and start
paying off debts.
• Stores selling these products would stop ordering as
much.
• As fewer products were being ordered less products
needed to be made.
• Since less products were being made fewer people were
needed to work in the factory.
• As more people were laid off from the factories, less
people had money to buy products being sold at the
stores.
Stock market crash
• In the late 1920’s there was a long bull market.
• This led many people to invest in the market and
buy stocks on margin.
• As long as stock prices continued to rise, people
could buy stock and sell it at a profit.
• As a result, if there was any decline in the price
of stocks people had to sell quickly so they
would not lose their money.
Stock market crash
• When professional investors started
selling off their stocks, the prices of stocks
began to fall. As the prices began to fall
everyone started selling off their stocks
and stock prices plummeted.
• Black Thursday=13 million shares were
traded
• Black Tuesday= 16 million shares traded
the worst day of the crash.
Banks in trouble
• Many banks loaned speculators money to
buy stocks.
• Many banks invested their money in
stocks.
• After the crash speculators could not pay
back their loans.
• The bank also lost the money they
invested in the market.
Banks in trouble
• When people heard that banks were running out
of money and closing, many people made bank
runs to get their money out of the banks.
• Banks do not keep money depositors put in.
They invest it.
• Since banks no longer had money to invest, they
could not make any money. They also could not
pay back all the people that deposited money in
their banks.
Dust Bowl
• Crop prices fell and farmers began
planting more crops to offset the losses.
• This caused soil to erode and blow away.
• Drought and over farming caused dust
storms to travel across the Great Plains.
• Dust Bowl=the name given