Erin Kathryn 2018 s e s Cau GREAT

© Erin Kathryn 2018 s e s Cau GREAT DEPRESSION e h t of Power. Point & Notes Set

© Erin Kathryn 2018 What was the Great Depression? • The Great Depression occurred in the 1930 s. • During this time, the economy was at an all time low. • The economy is the system of how money is made and used or spent. • A region's economy is connected with things like how many goods and services are produced and how much money people can spend on these things.

© Erin Kathryn 2018 What was the Great Depression? • As a result of the economy being in a crisis, many people lost their jobs. • People were not able to provide for themselves and their families. • Many people were hungry and homeless. • The Great Depression started in the United States, but became worldwide.

© Erin Kathryn 2018 How did this happen? • The Great Depression was caused by a series of factors that led to this extended period of hardship. • There was not one particular event that led to the Great Depression. • Let’s take a look at some of those factors.

© Erin Kathryn 2018 Stock Market Crash of 1929 • The Stock Market Crash of 1929 marks the start of the Great Depression. • The stock market is where stocks and bonds are traded (bought and sold). • Stocks are units of ownership in a company. • In the 1920 s, stocks became worth more than their actual value of the company.

© Erin Kathryn 2018 Stock Market Crash of 1929 • Many people were buying stocks on credit from the bank. • Eventually, the market slowed and the stock values began to fall. • People panicked and started to sell their stocks.

© Erin Kathryn 2018 Black Tuesday • On October 29, 1929, stock prices plummeted. • Around $15 billion dollars was lost in 1 day. • The crash lasted 4 days. • Millions of people lost money in the stock market crash. • Some lost their entire savings, their houses, cars, businesses, etc.

© Erin Kathryn 2018 The Drought • The farming industry had been struggling before the Great Depression. • Farmers were having trouble making a profit because new machinery was able to mass produce crops, which caused the price of crops to drop.

© Erin Kathryn 2018 The Dust Bowl • In the Midwest, a drought began that would last until 1939. • As a result, farmers could no longer afford to keep their farms. • Many moved to California in hopes of finding work.

© Erin Kathryn 2018 Overproduction • In the 1920 s, the economy was booming. • Many companies built new factories and hired workers. • After the stock market crashed, more goods were being produced than people could afford to buy. • Many people were hesitant to spend money. • Factories slowed production and laid off workers. • Many companies went out of business.

© Erin Kathryn 2018 Too Much Debt • When the economy was doing well in the 1920 s, there were many new products on the market, such as automobiles, refrigerators, radios, and washing machines. • For the first time, people were able to buy bigger items on credit. Credit is a loan.

© Erin Kathryn 2018 Too Much Debt • When the stock market crashed, people were no longer able to pay back their loans. • As a result, they lost their homes, businesses, farms, etc.

© Erin Kathryn 2018 Bank System Failed • In the 1930 s, if a bank closed, the accounts and money people had with that bank were lost. • After the stock market crashed, people feared that their banks would close and that they would lose all their money. • People removed their savings from the bank.

© Erin Kathryn 2018 Bank System Failed • Banks need cash to operate properly and many banks did not keep much cash in their building. • Banks applied to the Federal Reserve Banks for cash loans, but the requests were not often granted. • As a result, many banks began to fail.

© Erin Kathryn 2018 Bank System Failed • In the beginning years of the Great Depression, over 10, 000 banks closed their doors. • This impacted civilians greatly. • People lost their life savings. • Many people went from being rich to having nothing. • The U. S government did very little to help banks stay open.

© Erin Kathryn 2018 World Trade • While the Great Depression started in the United States, the entire world economy was struggling during this time. • The United States had loaned money to its allies during World War I. • These countries could not pay back the United States because they were struggling, too.

© Erin Kathryn 2018 Smoot-Hawley Act • In 1930, President Hoover signed the Smoot-Hawley Act. • This act raised taxes on imported goods. • The idea was to make foreign goods more expensive than American goods. • President Hoover wanted Americans to buy American goods to increase sales and job opportunities.

© Erin Kathryn 2018 World Trade • However, this meant an increased import tax for other countries buying American goods. • This angered other countries so much that they stopped buying American goods. • This led to decreased international trade and more American workers being laid off.