GREAT DEPRESSIONTHE GOOD TIMES COME TO AN END…

CAUSES• Stock Market Crash• Banking system collapses• High tariffs• Business fails• High unemployment• Increased food prices• Dust Bowl

BLACK TUESDAY• 1920’s “Bull” Market ends

• “Bear” vs “Bull” Market• Buying on Margin – purchase of stocks with credit or

borrowed money• Stock prices peak in August 1929• Tuesday, October 29, 1929• Stock market crashes

• More people want to sell stock than want to buy

• September 1929: stocks worth $87 BILLION• November 1929: Lost over $30 BILLION

COLLAPSE OF THE ECONOMY• Banks were heavily invested in the stock market• Banks had lent money on margin• People rushed to banks to withdrawal money

• Banks don’t keep money on hand• Did not have the money owed to people

• Banks went out of business• 1931 2,200+ banks closed

BUSINESSES CLOSED• Businesses had money in banks

• Some businesses closed• Some cut back on production• Needed fewer workers• Unemployment in 1929 went from under ½ million people

to more than 4 million in 3 months!!!

Stock Market Collapse

Businesses close

Banks loose money

People look for jobs/unemployed

People can’t buy stocks, rampant debt

DUST BOWL• Causes

• Severe drought – 1934-1937• Over farming – fragile root

system in plants to act as an anchor

• High winds – picked up loose topsoil and created “black blizzards”

• Results• Suffocated cattle and pasture

land• 1934 over 100 million acres

of farmland lost• One storm blew from Great

Plaines to Washington DC

WHO TO BLAME???• President Herbert Hoover was the

target of many• Families struggled to find food

• Searched city dumps• Boiled shoes

• Soup Kitchens• Hoover believed it was up to

individuals and institutions to provide charity, not the Federal Government

• “Hoovervilles” were built• Bonus Army was dealt with by using

force

1932 PRESIDENTIAL ELECTION• Hoover vs. Franklin Delano Roosevelt• Public had lost confidence in Hoover (and themselves)• Roosevelt was confident and optimistic• FDR won the 1932 election in a landslide