Great Depression
Some thoughts…
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The Great Depression was probably the
lowest point in American economic history
Devastating
13 million people were unemployed in
1932.
By 1933, one out of every four people in
America had lost his or her job.
Overview
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Stock Market Crash
Causes of the Great Depression
Dust Bowl
Life during the Depression
Hoover’s approach to improve the situation
Stock Market – Whoa!!!!!!!
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Companies sell shares
Shares = small percentage of ownership in a
company
Companies take $$$ and reinvest in improving
their business
Stock Market or Stock Exchange = place where
people can buy or sell their stock
(NYSE, AMEX, NASDAQ, CME, CHX)
Stock prices go up – business is doing well –
stockholders make money on their initial
investments
Stock Market Crash
Dow Jones Industrial
Average – average of
stock prices
1921-1929
500
Millionaires were created
by speculation.
DOW
400
300
200
100
Investors borrowed most of
the money to buy stock
– buying on margin.
0
1921
1929
A Day of
Reckoning
“They hollered and
screamed, they
clawed at one
another. The trading
floor of the New York
Stock Exchange
was like a bunch of
crazy men.”
Warm-up – May 25
Describe the “ripple effect” of the Great Stock
Market Crash – p. 741.
October 29, 1929 – “Black Tuesday” – The
New York Stock Exchange erased over 5
billion dollars worth of share value!
Stock Market Crash signaled
that there were big problems
with the economy!!!
The Great Depression followed
and lasted through to WWII.
Causes
Uneven distribution
of wealth
Too many rich and too
many poor and not enough
in between
Over-speculation
Too many people buying
with borrowed money
Overproduction
Factories producing
more than people needed
Too little money in
circulation
Government limited $$
supply to discourage lending
Stock Market
Stock prices plummet
Investors lose millions
Business lose profits from investors
Businesses
Business cut back
Workers laid off
Consumer spending drops
Banks
Business and workers can’t
repay loans
Bank fail
Saving accounts wiped out
Business Failures
1929-1932 = 85,000
Banks
1929-1932 = 9,000 bank failure
= 9,000,000 accounts wiped out
National Income
1929 = $81 billion
1932 = $41 billion
Dust Bowl
Caused by over
farming – removal
of grass to farm
 Drought
 Dried soil created
large dust storms
 500,000 Americans
left homeless
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Life During the Great Depression
Unemployment
Homelessness
Destruction of Families
Farm losses
p.746-748
Hoovervilles
How did the Depression affect
people’s health?
How did the Depression affect
families?
Hoover
“the ship would right itself”
“People will pick themselves up by the
bootstraps”
Was he willing to help people recovery?
Hoover
FDR
• Believed that Federal Relief would
destroy “destroy people’s selfrespect and create a large
bureaucracy.”
• Thought the key to recovery was
confidence.
• Blamed Great Depression on
“world-wide economic
conditions beyond our control.”
• Believed in voluntary controls by
business
• Public began to blame Hoover and
the Republicans for depression.
• Suffered from this disease polio.
• Promised a New Deal for Americans
• “The only things we have to fear is
fear itself.”
• Promised bold, persistent
experimentation.
• New Deal refers to the relief,
recovery, and reform programs of
FDR’s administration that were
aimed at combating the Great
Depression.
FDR
http://www.americanrhet
oric.com/mp3clips/poli
ticalspeeches/fdrfirsti
naugural4444438583
52845.mp3
http://www.socialstudieshelp.com/USRA_New_Deal.htm