Great Depression

Some thoughts… 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 Stock Market Crash Causes of the Great Depression Dust Bowl Life during the Depression Hoover’s approach to improve the situation

Stock Market – Whoa!!!!!!! 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 CrashDow Jones Industrial

Average – average of stock prices

Millionaires were created by speculation.

Investors borrowed most of the money to buy stock – buying on margin.

1921-1929

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100

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1921 1929

DOW

“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.”

A Day of Reckoning

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.

CausesUneven distribution

of wealthToo many rich and too

many poor and not enough in between

Overproduction

Factories producing more than people needed

Over-speculationToo many people buying

with borrowed money

Too little money in circulation

Government limited $$ supply to discourage lending

Stock MarketStock prices plummetInvestors lose millionsBusiness lose profits from investors

BusinessesBusiness cut backWorkers laid offConsumer spending drops

BanksBusiness and workers can’t

repay loansBank failSaving 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

Life During the Great DepressionUnemployment

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

• Believed that Federal Relief would destroy “destroy people’s self-respect 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.

FDR

• 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.americanrhetoric.com/mp3clips/politicalspeeches/fdrfirstinaugural444443858352845.mp3

http://www.socialstudieshelp.com/USRA_New_Deal.htm