The Great Depression
Defining Depression
 What is an economic depression?
The 1920s
 The 20s were known as
the “Roaring 20s”
 Was a time of peace
and prosperity in
America.
 Americans lived and
spent like there was no
tomorrow.
1920s In Europe
 Growing consumer culture
 Entertainment



Movies
Radio
Sports
 Standard of living increasing
 “New Woman”
Woman voting in Finland (1906)
The “New Woman”
Economic Weaknesses in Germany
 Germany & reparations

Hyper inflation
 Dawes Plan
Black Tuesday: Stock Market Crashes
 On October 29, 1929
the Stock Market
Crashes.
 The crash leads to a
worldwide depression
Causes of Great Depression: 1
 Over speculation in the stock market



What is a stock?
People were buying stock on credit (on
margin) in hopes that they would make money
to repay.
Massive gambling on the stock market made
stock practically worthless!!!
Causes of the Great Depression: 2
 Overborrowing



People were buying too much stuff on credit
Got to the point that people were in too much
debt
Businesses were not getting paid, and not
making money.
Causes of the Great Depression: 3
 Overproduction in Factories and Farms



Factories and farms were making too much
Factories and farmers were losing money and
forced to shut down.
Unemployment skyrockets
Causes of the Great Depression: 4
 Uneven distribution of wealth



The rich were getting richer, while the poor
were getting poorer.
Rich were not spending their money, so the
flow of money trickled to a halt.
Caused money value to inflate
Causes of the Great Depression: 5
 Failure of Leadership of Governments
 When crises hit nations, government did not
act
 Governments slashed budgets instead of
spending money
 John Maynard Keynes
Causes of the Great Depression: 6
 High Protective Tariffs


What is a tariff?
High tariffs kept American businesses from
having to compete with imported goods.


Hawley-Smoot Tariff of 1930
Countries retaliated by raising tariffs on the
U.S.
Impacts of the Great Depression
 Unemployment




increased
Homelessness
increased
Workers became more
militant
Farmers lost their farms
Workers migrated in
search for work.