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The Great DepressionThe Great Depression
Rising MarketRising Market
The rising stock market dominated the news
People who were invested were waiting for the fall of the Market, so they could sell their shares prior to the drop.
The rising stock market dominated the news
People who were invested were waiting for the fall of the Market, so they could sell their shares prior to the drop.
Steps to DepressionSteps to Depression
Stocks had peaked in September, then began to slowly fall.
Wednesday October 23, 1929 The stock market had fallen and created
a fear that this was the end of the record highs.
People wanted to take out there money before the shares lost their value.
Stocks had peaked in September, then began to slowly fall.
Wednesday October 23, 1929 The stock market had fallen and created
a fear that this was the end of the record highs.
People wanted to take out there money before the shares lost their value.
Black ThursdayBlack Thursday
After a poor Wednesday people entered Thursday to sell there stocks before the lost all of their value
Investors who bought General Electric at $400 sold the stocks for $283
After a poor Wednesday people entered Thursday to sell there stocks before the lost all of their value
Investors who bought General Electric at $400 sold the stocks for $283
Stop the panicStop the panic
A group of bankers pooled their money to purchase stock. This created temporary stabilization.
By Monday stocks began to fall once again.
A group of bankers pooled their money to purchase stock. This created temporary stabilization.
By Monday stocks began to fall once again.
Black TuesdayBlack Tuesday
October 29, 1929
People began to sell stocks in mass quantity.
16.4 million shares were sold Normally 4-8 million shares are sold
October 29, 1929
People began to sell stocks in mass quantity.
16.4 million shares were sold Normally 4-8 million shares are sold
Great CrashGreat Crash
Beyond Tuesday the market continued to fall.
By November 13, 1929 overall losses totaled $30 Billion
Beyond Tuesday the market continued to fall.
By November 13, 1929 overall losses totaled $30 Billion
Initial ShockInitial Shock
Invested population: 4 million out of 120 million
But large losses began to effect the population as a whole.
Invested population: 4 million out of 120 million
But large losses began to effect the population as a whole.
Risky loans hurt banksRisky loans hurt banks
Banks earn their profits on the interest they earn from lending out their deposits.
Banks loaned huge sums of money during the 20’s
Stock prices fell, the business were unable to repay their loans.
Banks began to fail.
Banks earn their profits on the interest they earn from lending out their deposits.
Banks loaned huge sums of money during the 20’s
Stock prices fell, the business were unable to repay their loans.
Banks began to fail.
Consumer BorrowingConsumer Borrowing
Banks make money on loans they lend to consumers.
Consumers borrowed heavily during the 20’s to purchase consumer goods.
When banks called in their loans, customers did not have the money to repay them.
Banks make money on loans they lend to consumers.
Consumers borrowed heavily during the 20’s to purchase consumer goods.
When banks called in their loans, customers did not have the money to repay them.
Bank RunsBank Runs
The Great Crash resulted in bank runs
Fearful banks would run out of money people rushed to make withdrawals.
To pay back peoples deposits banks had to call in there loans, but loans couldn’t be paid, so banks couldn’t get the money.
The Great Crash resulted in bank runs
Fearful banks would run out of money people rushed to make withdrawals.
To pay back peoples deposits banks had to call in there loans, but loans couldn’t be paid, so banks couldn’t get the money.
Bank FailuresBank Failures
Unpaid loans and bank runs caused many banks to fail.
Banks closed their doors when they couldn’t pay their depositors’ money.
5,500 banks failed.
Unpaid loans and bank runs caused many banks to fail.
Banks closed their doors when they couldn’t pay their depositors’ money.
5,500 banks failed.
Savings wiped outSavings wiped out
Bank failures wiped out what little savings people had.
By 1933 9 million people lost their savings.
Bank failures wiped out what little savings people had.
By 1933 9 million people lost their savings.
Cuts in productionCuts in production
People no longer had money to buy unnecessary products.
People no longer had money to buy unnecessary products.
Rise in unemploymentRise in unemployment
Business had to cut back production, so they laid off workers.
Unemployment grew.
Business had to cut back production, so they laid off workers.
Unemployment grew.
The Great DepressionThe Great Depression
Economic contraction: an economic decline marked by falling out put of goods and services.
Long economic contraction is known as a depression
Economic contraction: an economic decline marked by falling out put of goods and services.
Long economic contraction is known as a depression
Impact of DepressionImpact of Depression
Workers- Factories close unemployment (12 million unemployed)
Farmers- Prices of goods drop Farms fail World- American investors can no
longer purchase foreign products
Workers- Factories close unemployment (12 million unemployed)
Farmers- Prices of goods drop Farms fail World- American investors can no
longer purchase foreign products
Causes of DepressionCauses of Depression
Unstable economy1.Wealth unevenly distributed (Made rapid recovery impossible)2.Overproduction Over speculation 1.Boom was a result of borrowed money (Buying on Margin)
Unstable economy1.Wealth unevenly distributed (Made rapid recovery impossible)2.Overproduction Over speculation 1.Boom was a result of borrowed money (Buying on Margin)
Effects of DepressionEffects of Depression
Investors and businesses lost millions
Thousands of banks fail, savings are wiped out
Investors and businesses lost millions
Thousands of banks fail, savings are wiped out
Social Life During the Depression
Social Life During the Depression
Poverty spreads
Hardest hit were the lower class. Homeless population grows
Poverty spreads
Hardest hit were the lower class. Homeless population grows
Hoovervilles- Shanty towns named after the President who the people blamed for not resolving the crisis.
Hoovervilles- Shanty towns named after the President who the people blamed for not resolving the crisis.
Farm LifeFarm Life
Low Crop Prices Families couldn’t pay house
payments People were evicted
Low Crop Prices Families couldn’t pay house
payments People were evicted
Dust BowlDust Bowl
Environmental Problem 1931-1940 Occurred because of severe
draught
Environmental Problem 1931-1940 Occurred because of severe
draught
