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The Great Depression. Rising Market  The rising stock market dominated the news  People who were invested were waiting for the fall of the Market, so.

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Presentation on theme: "The Great Depression. Rising Market  The rising stock market dominated the news  People who were invested were waiting for the fall of the Market, so."— Presentation transcript:

1 The Great Depression

2 Rising 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.

3 Steps 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.

4 Black 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

5 Stop 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.

6 Black 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

7 Great 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

8 Initial 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.

9 Risky 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.

10 Consumer 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.

11 Bank 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.

12 Bank 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.

13 Savings wiped out  Bank failures wiped out what little savings people had.  By million people lost their savings.  Bank failures wiped out what little savings people had.  By million people lost their savings.

14 Cuts in production  People no longer had money to buy unnecessary products.

15 Rise 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.

16 The 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

17 Impact 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

18 Causes of Depression  Unstable economy 1.Wealth unevenly distributed (Made rapid recovery impossible) 2.Overproduction  Over speculation 1.Boom was a result of borrowed money (Buying on Margin)  Unstable economy 1.Wealth unevenly distributed (Made rapid recovery impossible) 2.Overproduction  Over speculation 1.Boom was a result of borrowed money (Buying on Margin)

19 Effects 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

20 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

21 Hoovervilles- Shanty towns named after the President who the people blamed for not resolving the crisis.

22 Farm 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

23 Dust Bowl  Environmental Problem   Occurred because of severe draught  Environmental Problem   Occurred because of severe draught


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