1929-1939
the economic boom of the 1920s caused problems an economic BUST in the 1930 and changed people s the attitudes about the role of government in controlling the economy Great Depression = economic hardship during the 1930s with high unemployment and poverty (very poor)
1. The Business Cycle - The economy naturally goes through times of recession, recovery, and prosperity.
2. The Stock Market The stock market is a place where stocks and bonds are "traded" meaning bought and sold. Stock - units of ownership in a company. Why would a company sell stock?? TOO MAKE MONEY!!!
The Stock Market When you buy stock, you become a shareholder, which means you now own a "part" of the company. If the company's profits go up, you "share" in those profits. If the company's profits fall, so does the price of your stock. If you sold your stock on a day when the price of that stock falls below the price you paid for it, you would lose money. In the stock market, prices rise and fall every day. When you invest in the stock market, you are hoping that over the years, the stock will become much more valuable than the price you paid for it.
OBJECTIVE: you will be able to identify the main causes of the Great Depression. 1. The Stock Market Crash of 1929 2. Overproduction 3. Over speculated on Stocks 4. Banks Failed 5. Federal Reserve failed to save failing banks 6. High Tariffs
BLACK TUESDAY On Oct. 24, 1929 the market began to drop more than the previous months and people began to panic. By Tuesday Oct.29, 1929 the prices plunged and stocks became worthless. This became known as Black Tuesday.
Black Tuesday stock market lost $14 billon.
2. Overproduction - making too many goods and farmers growing too much following WWI.
Factories and farms were producing more goods than the people could afford to buy. As a result, prices fell, factories closed and workers were laid off. Prices for farm products also fell, as a result, farmers could not pay off bank loans and many lost their farms.
3. Overspeculation- buying too much on credit (even stock buying stock on margin ). Banks loaned money to people who invested in the stock market. When the market crashed, people could not pay their loans and the banks could not give depositors their money. As a result, many banks closed down and many families lost their life savings.
4. The Federal Reserve failed to prevent the collapse of the banking system Federal Reserve = the central banking system in the United States It helps banks the way banks help people THE FED
5. High Unemployment Rates Jobless became homeless Farming families migrated to look for jobs
In one school, a teacher ordered a thin girl to go home to eat. "I can't, replied the girl. "This is my sister's day to eat. I would take off my glasses so I would not see the bugs on the food from the trash.
High tariffs discouraged international trade Tariff = tax on imported goods intended to make imported goods very expensive and encourage people to buy domestic products
During the Great Depression, people learned how to survive. What do you think this is? This is a coat made out a feed sack. Many people made curtains, clothes, table clothes, etc. Not all feed sacks were this drab. After a while feed sacks where made with flowered patterns so people could use the material.
Check your knowledge: What were the causes of the Great Depression? - WOW ME - explain as many as you can!!
How to Remember! Blame HOOVER! 1. High Tariffs 2. Overproduction 3. Over speculation 4. Very many Banks failed 5. Economic Crash (Stock Market) 6. Federal Reserve Failed
Distant cousin of Theodore Roosevelt He married his 5 th cousin, Eleanor Roosevelt Suffered from polio in 1921 (wheel chair) Very few pictures showed him in a wheel chair
32 nd President of the USA (1933-1945) Beat Herbert Hoover in election by a landslide People wanted help and relief from the government FDR promised relief, recovery, and reform
R R R R-R-R elief - give help immediately to jobless workers who were in need. ecovery - give help to banks, businesses, farmers, and workers to recover from the Great Depression. eform make long-term changes in the economy so that a depression would never happen again.
Roosevelt s plan to help the economy. The New Deal was made up of a series of programs to help the nation recover.
Fireside Chats a series of 31 radio broadcast messages from FDR FDR explained issues about the economy in simple language (like the bank crisis), his plans for a New Deal, and asked Americans tell me your troubles. Click the picture to listen As a result, many wrote FDR letters about their troubles
Though FDR s plan began moving the country out of the Depression, by 1937 the country was back in an economic recession It was not until our involvement in WWII that the country was completely out of the Great Depression. Many New Deal programs like TVA, Social Security, and FDIC still exist today