the Great Depression


What is this woman thinking?

What country did these people live in?

Or these people?

In what country might you find this wonderful school?

Where are these people going?

What are these people doing?

Uh-Oh! What’s happening?

Look out! What is going on!!??

What are these people doing?

What is this woman thinking?

Approximately how many points did the market drop between 1929 & 1933?

Between 1929 and 1930, unemployment increased by what percent (approximately)?

What was the highest level of unemployment and what year did it occur?

The Great Depression

A time of severe economic decline with extremely high unemployment, bank failures and very low or negative growth in business.

Causes of the Great Depression

Overview: During the

1920s the economy was doing very well. Everyone wanted to make money.

The stock market was going great and it was a quick way to make money.

People would take out loans and invest their loans in the stock market. Banks placed their customers’ deposits into the market.

Also, the industrial revolution had caused an increase in productivity for farming and industry. Overproduction occurred and warehouses and grain silos filled up with few buyers because demand was very low. Farmers had been in a depression for years before the “Great Depression” occurred.

Three main causes of the Great


Stock Market “blows up”: over-speculation on stocks caused “

Black Tuesday” (Oct. 29, 1929): the day the stock market began a free for all. Stocks became worthless and investors lost $30 billion dollars. When stocks went to zero businesses and companies collapsed. Some investors couldn’t handle reality and jumped out of high-rise windows.

Banks collapse: Banks called in their loans. When people couldn’t pay banks started to collapse. People panicked, running to their banks to withdraw all their money. Most people got their too late and lost their life savings.

Tariffs make matters worse: The President(Herbert Hoover) felt that tariffs would help revive business (Hawley Smoot Tariff). All it did was tick off other countries, so they also set tariffs on their imports. Now no one could afford to buy much of anything because prices became inflated.

Impact of the Great Depression

High unemployment (25% at one point), inflation, record number of bank failures. The crash and high unemployment meant people couldn’t pay bills. Homelessness became a monster problem.

Fixing the Problem:

Overview: President Herbert Hoover really thought the federal government should not been too intrusive in economic matters. Therefore, he did nothing (not exactly true). In 1932 voters replaced Hoover with Franklin D.

Roosevelt (FDR). FDR said, “The only thing we have to fear is fear itself.” He made people feel a lot better. It was his actions, not his words, which helped people the most, however. He believed the government should do something and the policies he implemented affect our lives today. These policies are referred to as the New Deal.

Fireside chats

New Deal Policies: Relief

Federal Emergency Relief Agnecy

(FERA) -

gave states money to use with welfare programs.

Works Progress Administration (Civil Works)federal jobs building roads etc. . .

Civilian Conservation Corps - provided a federal job restoring parks and beaches


Tennessee Valley Authority (TVA) - it helped bring cheap electricity and jobs to one of the poorest regions in the U.S.

Other recovery programs

Federal Housing Authority (FHA)

people pay their mortgages

- to help

• Emergency banking Act – temporarily closed banks and helped weak banks stay open and keep strong banks strong.

• Agricultural Adjustment Act- to help farmers limit their production.

• National Recovery Act - tried to do the same thing for businesses.

By limiting crop production the AAA actually hurt sharecroppers in the South. In the Great Plains, farmers had to deal with the dust bowl. Many packed up and moved to California


Both the AAA and NRA were deemed unconstitutional by the Supreme Court during the 1930s!

When he ran for reelection in 1936, FDR had his fare share of detractors. Many claimed that he was creating a socialist government. Others worried about the rising national debt.


To make sure that nothing like this ever happened again!


Fair Labor Standard Act

created a federal minimum wage

(25 cents), made a work week 44 hours and outlawed child labor

• Federal Deposit Insurance Corp. – all banks deposits are insured up to $5,000 (now it is $250,000.00).

• Securities & Exchange Commission - regulates stock market activities.

Glass-Steagall Act

deposited money.

- made it illegal for banks to invest

• Social Security– to protect the elderly, disabled and orphans

What ended the Great Depression? The New

Deal programs created by FDR changed

America in the long and short term. However, they did not end the depression!

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