Presentation on theme: "What goes up must come down!"— Presentation transcript:
1What goes up must come down! Essential Question—How did economic choices made in the 1920s lead to the stock market crash and the Great Depression?
2OverviewThe economic boom of the 1920s collapses in 1929 as the United States enters a deep economic depression. Millions of Americans lose their jobs, and president Hoover is unable to end the downslide.
3Main IdeaAs the prosperity of the 1920s ended, severe economic problems gripped the nation.Why it matters now?The Great Depression has had lasting effects on how Americans view themselves and their government
4Critical ThinkingHow did the economic trends of the 1920s help cause the Great Depression? PgIndustries in troubleFarmers struggleConsumers have less moneyLiving on creditUneven distribution of income
5Crisis in the Farm District Farmers struggled as a result of the end of WWI.Prices fell with the decreased demand after the war.Farmers began producing more trying to sell more. Made problems worse.Banks began to foreclose on land.
6Old Decaying Industries Railroads, textiles, steel making little profits after the war.Trucks, buses and private cars hurt the R.R. industries.New forms of energy hurt lumber and coal.Improved technology made America too productive.
7Living on CreditBy the late 1920s consumers buying less due to rising prices, stagnant wages, unbalanced distribution of income and consumer debt due to credit.Many Americans lived beyond their means. (wasteful spending)
8Uneven Distribution of Income Rich got richer while the poor got poorerUnequal distribution of wealth meant that Americans could not participate fully in the economic advances of the 1920s
9Tariffs and War DebtsHawley-Smoot Tariff Act- highest protective tariff in history designed to protect American farmers and manufactures. Reduced competition, hurt exports, therefore creating loss of jobs. Countries retaliated by raising their tariffs as well.Reduced global trading
10Dreams of Riches in the Stock Market… p. 673 The stock market was the most visible symbol of American prosperity in the 1920s.Define: Dow Jones Industrial Average, “bull market”, speculation, buying on marginDescribe the financial climate of the stock market during the 1920s.
11The Stock Market Crashes The “snowball effect”In 1929 stocks prices began to dip. This shook peoples confidence and so they started to sell their shares.This created a chain reaction that would cause prices to plummet which encouraged more people to sell.“Black Tuesday”—the day of financial collapse in the stock market. (October 29, 1929) Investors lost billions and those involved were stuck with huge debt and lost savings.
12Main IdeaThe stock market crash of 1929 signaled the Great Depression-period of time in which the economy plummeted and unemployment skyrocketed.Skillbuilder—p 676
13Unemployment vs. Income and Spending What conclusions can you draw by comparing the two graphs.
14Failure in the Economy (Banking) People panicked and withdrew money from banks. “run on the bank”Banks could not give all money back because they invested in the stock marketBy ,000 of the nations 25,000 banks closed. Millions of people lost their savings
16Failure in the Economy (business) The nation’s total output of goods and services was cut in half. Meaning loss of jobs and investment90,000 business went bankrupt.Unemployment rose from 3% to 25% by 1933 (13 million workers)Hawley-Smoot Tariff further hurt international trade further hurting business.
17Causes of the Great Depression Tariffs and war debt policies that cut down the foreign marketA crisis in the farm sectorThe availability of easy creditUnequal distribution of incomeOld Decaying Industries
19AssignmentHow do you think the Great Depression changed people’s lives? Write a diary entry from the point of view of the man in this cartoon.Draw an original cartoon to illustrate the impact of financial collapse following the stock market crash. Use the characters in this cartoon or invent your own.
21Main IdeaDuring the Great Depression, Americans did what they had to do to survive.Why it matters now?Since the Great Depression, many Americans have been more cautious about saving, investing, and borrowing.
22Hardship and Suffering (Cities) Great Depression brought hardship, homelessness, and hungerPeople lost jobs and homes and were forced to the streets or shantytownsSoup kitchens and bread lines provided food for unemployed and jobless
23Hardship and Suffering (Rural) Thousands of farmers lost their land,000 farms were lostThe drought and over planting created the Dust Bowl which destroyed the American Great Plains region forcing many Americans to migrate West abandoning the land.Okies were migrates from Dust bowl states
24Hardships and Suffering (Family) Making ends meet was a daily struggle, families broke apart.Men struggled with frustration from becoming workers to wonderers. Some men abandoned their families.Women battled to keep the family together through budgeting, shopping together, etc.Women were the backbone of the American family during the Great Depression.
25Hardships and Suffering (Children) Poor diets and lack of health care lead to serious health problems.Schools were either forced to shorten the school year or shutdown the school.Boys and girls abandoned families and were forced to ride the rails in a free-for-all type atmosphere
26Hardship and Suffering (Social) suicide rates rose more than 30%Mental hospitals grewEconomic problems forced people to make sacrifices and readjust prioritiesStigma of poverty and having to skimp and save never disappeared.People depended on one another more.All of the effects of the Great Depression shaped your Grandparents and has had some affect on your upbringing.
52Main IdeaPresident Hoover’s conservative response to the Great Depression drew criticism from many Americans.Why it matters now…Worsening conditions in the country cause the government to become more involved in the health and wealth of the people.
53Hoover and the Depression Hoover believed in rugged individualism meaning people should succeed through their own efforts.Should not depend on government to bail them out. (welfare)Handouts would weaken peoples self-respect and create a welfare state. (Sense of entitlement)Hoover believed that the economy would fix itself and rebound in time. (It did not)
54Hoover and the Depression Boulder Dam- public works project that provided work relief, provide electricity, and irrigation to CA, CO, UT, WY, & NM.Read 686—“Democrats Wind in 1930 Congressional Elections”Hoover began providing direct relief to people.Federal Home Loan Bank Act- lowered mortgage rates & refinanced farmer loansReconstruction Finance Corporation- $2 Million for banks, life insurance comp., railroads, business
55Hoover and the Depression Why was Hoover destined to lose the Presidential Election of 1932 after the Bonus Army incident?P. 688 &689
56FDR and the New Deal Franklin D. Roosevelt won the election of 1932. Prior to taking office, Roosevelt organized the “Brain Trust”- who were a group of advisers who formulated a set of policies that would later become known as the New Deal.From March 9 to June 16, 1933 the first hundred days of FDR’s presidency he passed 15 major legislations.First action conducted by FDR was to declare a “bank holiday”First and Second New Deal (p. 706)
57FDR and the DepressionThe New Deal forced FDR to practice deficit spending which meant spending more money than the government received in taxes.Supreme Court declared many New Deal legislations unconstitutional because they gave the Executive Branch and the federal government to much power over states and people.
62Impact of the New Deal Expanded the government’s role in the economy. Created the FDIC and the SEC.Social SecurityTennessee Valley Authority built a number of dams that improved an depressed area of the country.Most importantly it restored hope.
63New Deal LegacyLabor- standard wages and rights, eliminated child laborFarmers- price support, improved farming methodsBanking/Finance- reformed the stock market, insurance on bank accountsSocial Welfare- expand government role to provide for peopleEnvironment- increase protection of landWagner Act, Fair Labor Standards, National Labor Relations BoardSoil Conservation ServiceSecurities Exchange Commission, FDICSocial SecurityCCC, Soil Conservation Service, Tennessee Valley Authority