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The Great Depression
1920’s Automobile Industry
Demand For Cars Increases
Production of Cars
Increases
Demand of Resources Increases
(Steel, Rubber &
Oil)
Demand For
Workers Increases
Disposable income
increases
1920’s Stock Market
Market Growth=> New Investors
More Investors=> Higher Stock Prices
Higher
Stock Prices
=> Market
Growth
Market Growth=> New Investors
More Investors=> Higher Stock Prices
Higher Stock
Prices =>
Market
Growth
Market Growth=> New
Investors
More Investors=> Higher Stock Prices
Higher
Stock
Prices =>
Market
Growth
Stock Market Crashing
Sales down- Rumors of major Investors Withdrawing Money
Optimism of
Stock Holders
Decreases
Sto
ck P
rices
Dro
p
Sto
ckh
old
ers
Pan
ic
Stock Market Crash
10/18/1929=
10/24/1929=
10/25/1929=
10/27/1929=
10/28/1929=
Stock Market Crash
Fractional Reserve System
Person deposits $1000 into a Bank
The Bank Loans out $900 dollars to People loaning money
People who loaned money pay bank back plus interest ($900 X 5% = $945)
Depositor takes $1000 out of Bank
Effects on Banks
Wall Street Crashes- Banks Lose Investments
Depositors lose
savings on Wall
Street- Go to
Withdraw Money
Bank fails
because it
doesn’t have
all of the
depositors
money
Deposito
rs lose
savings
Automobile Industry during the Great Depression
Demand for Cars Decrease
s
Decrease in
Production of Cars
Demand for
natural Resource
s Decrease
s
Demand for
workers decrease
s
Disposable Income decrease
s
Demand for Cars Decrease
s
Decrease in
Production of Cars
Demand for
natural Resource
s Decrease
s
Demand for
workers decrease
s
Disposable Income decrease
s
Farm Failures
Need to make up
for losses
Plant More Wheat
To much wheat
has been
harvested
Farmers income
goes down
Dust Bowl
Increase Wheat for WWI
Bad Farming Practices
Drought
Top Soil Erodes
Dust Bowl
Hopelessness of the Individual
More Competition
For Jobs
More Need For Social Programs
Local Programs
couldn’t help everyone
Beg or Steal to Survive
Unemployment is up
Herbert Hoover
Hoover’s Economic Philosophy
Bull Market
Classical Economics
Associative State
Franklin D. Roosevelt
The New Deal
Stop The Banking Crisis
Help Farmers
Increase Aid To The Needy
Reduce Unemployment
Help Wall Street
Effects on Banks
Wall Street Crashes- Banks Lose Investments
Depositors lose
savings on Wall
Street- Go to
Withdraw Money
Bank fails
because it
doesn’t have
all of the
depositors
money
Deposito
rs lose
savings
The New Deal on Banking
Bank Holiday
Government Oversight on Banks
Government Insured Peoples Deposits
$1 Billion New Deposits in a Month
Stock Market Crashing
Sales down- Rumors of major Investors Withdrawing Money
Optimism of
Stock Holders
Decreases
Sto
ck P
rices
Dro
p
Sto
ckh
old
ers
Pan
ic
New Deal on the Stock Market
Federal Securities Act
Securities and Exchange Commission
Farm Failures
Need to make up
for losses
Plant More Wheat
To much wheat
has been
harvested
Farmers income
goes down
New Deal on Farming
Give farmers a subsidy to plant less
Better Farming Practices
Increase Access to Electricity
New Deal on Unemployment
Civilian Conservation Corps
Tennessee Valley Authority
National Industrial Recovery Act
The Second New Deal
Works Progress Administration
Social Security
National Relations Labor Act
Supreme Court on “The New Deal”
Parts of NIRA= Unconstitutional
Tax to Support Farmer Subsidy’s= Unconstitutional
FDR on the Supreme Court
9 Judges Stop FDR Policy’s
Appoint 6 More Judges To Tip Vote
Downward Cycle
Demand for Cars Decrease
s
Decrease in
Production of Cars
Demand for
natural Resource
s Decrease
s
Demand for
workers decrease
s
Disposable Income decrease
s
Upward Cycle
People Have More
Money to Spend
PeopleIncrease Purchase
s
Businesses
Increase Productio
n
Business’s Hire More People
