The Great DepressionThe Great

Depression

Black Tuesday & the Great Crash

• bull market – rising stock prices (way too fast) plummeted to bear market – falling stock prices– business community with

big profits• investors tried to sell their

stocks before prices fell any lower too many selling

• stock market collapsed!• Dropped $30 billion in 1st

week

The Bank

• loans busted because of stock investments banks closing

• people panicked & rushed to withdraw their money banks don’t keep a lot on hand, they ran out of money banks closed

Business Failures

• when banks closed, many businesses lost their corporate savings & operating accounts businesses closed or cutback on production & workforce

• Unemployment increases (rate = 25%)

Causes of the Great Depression

• overproduction – production exceeded consumption & surpluses piled up

• global trade problems – world trade declined (Europe recovering from WWI) not a lot of aid

• the Dust Bowl

President Hoover• thought that relief and recovery

should come largely through voluntary cooperation rather than federal efforts

• created the RFC (Reconstruction Finance Corporation) – direct relief to unemployed; loaned money to railroads and banks

• lowered taxes to stimulate the economy

• did not realize how severe the depression was

Election of 1932

• FDR (NY governor/D) vs. Hoover (U.S. President/R) FDR won

• Roosevelt promised relief, recovery, and reform

• A new deal for the American people with federal help

The New Deal

• federal govt. approved and financed programs that battled the depression

• How did they afford this? – Raise taxes– Inflation

Farmers• as prices bottomed out, many farmers

could not sell their crops• without income, they could not repay

their house and land loans• banks foreclosed on their homes & land• If things weren’t bad enough, drought

struck!• Dust Bowl – dust storms on the Great

Plains• families migrated west for a new life (to

California)

Family Life

• divorce rates increase, marriage & birth rates decreased

• men left their families (some in search of jobs)

• children dropped out of school to help make money (hoboes)

• food lines (aka soup kitchens, bread lines) – fed the poor

QUIZ TIME

https://www.youtube.com/watch?v=QPKKQnijnsM

QUIZ TIME

https://www.youtube.com/watch?v=QPKKQnijnsM

SUMMARYSUMMARY

• 1. T/F Consumerism of the 1920s was a contributing factor of the Great Depression.

• 2. T/F Unemployment reached 50% during the Great Depression.

• 3. Which of the following was NOT a cause of the Great Depression? – a. overproduction– b. global trade problems– c. America’s involvement in WWI– d. the Dust Bowl

• 4. Which president was blamed for the Great Depression?– a. Woodrow Wilson– b. Herbert Hoover– c. FDR– d. Teddy Roosevelt

• 5. Which president was credited with saving the country from the Great Depression?– a. Woodrow Wilson– b. Herbert Hoover– c. FDR– d. Teddy Roosevelt