Presentation on theme: "The Great Depression 1929-1939. Impacts of Depression Prices of stock dropped 40% 86,000 businesses failed 9,000 banks went out of business 9 million."— Presentation transcript:
Impacts of Depression Prices of stock dropped 40% 86,000 businesses failed 9,000 banks went out of business 9 million saving accounts Wages were decreased by at least 60% Unemployment from 9% to 25% 15 million people unemployed
The 6 Causes 1. Unequal distribution of Wealth - 2% owned 3/5 (60%) of wealth… - … 98% shared the remaining 2/5 (40%) - ½ population living below poverty level - unequal balance between production and consumption
The 6 Causes 4. High Tariffs and War Debts - Hawley-Smoot Tariff = tax on imports - What was the goal? - Led to unbalanced foreign trade & … - economic warfare = other countries did same - war debt: U.S. as creditor; E. couldn’t repay
The 6 Causes 5. Overproduction in Industry & Agriculture - farmers bought machinery on credit…to increase production - >> overproduction - >> no jobs = no $ to buy - >> couldn’t pay off debt... - … foreclosures on farms
The 6 Causes 6. Stock Market Crash - Reasons for investing in market - had $ already to invest - Buying on margin - Stock Speculation - October 24 th : Black Thursday -Bunk Runs - October 29 th : Black Tuesday ($16 mil)
BUYING ON MARGIN Who did they need to attract? HOW? Investors only had to pay for 10% of the stock's actual value at time of purchase If a stock is $100 you can pay $10 now and the rest later when the stock rose balance was paid at a later date
Buying on margin High interest rates Demand payment anytime If stocks fall then don’t have money to pay back Stocks go up Borrowers sell at high price Pay off Loan Interest + make extra $$$ The good The bad
STOCK SPECULATION people would buy and sell stocks quickly to make a quick buck b/c of all this buying & selling, stock value increased Ex: G.E stock $130 $396/share
BLACK TUESDAY, Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last until 1942 THE CRASH
STOCK MARKETCRASH Loss of confidence Uneven wealth Rising debt Stock speculation Overproduction Hardships of farmers and factory workers
The Effects Widespread unemployment > poverty > hunger - What led to this???? - national income: 1929 = $81 billion 1932 = $41 billion - 15 million jobless
Many waited in unemployment lines hoping for a job.
People in cities would wait in line for bread to bring to their family.
Some families were forced to relocate because they had no money.
“ Hooverville ” Some families were forced to live in shanty towns A grouping of shacks and tents in vacant lots They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.