1. Causes and Impacts of the Great Depression
US History

2. Standards and Objectives
QC-D1E – Identify and explain the economic factors that contributed to the stock market crash of 1929 and the Great Depression.
QC – D1F – Explain the economic, environmental, and social impact of the Great Depression

3. I. The Long Bull Market Stock Market
A system for buying and selling shares of a company.
Bull Market – a long period of rising stock prices.
Prolonged bull market convinced many Americans to invest heavily in stock in the 1920’s.
As the market continued to soar, many investors began to buy stocks on margin (loan)
As long as prices continued to rise, this was safe

4. I. The Long Bull Market The Stock Market 3. Speculation
A. By the late 1920’s many Americans participated in speculation.
1. Risky investing with the hopes of making a quick $
2. Made stocks seem more valuable then they were.

5. II. The Great Crash Crash!
A steady decline in investors led the prices of stocks to drop drastically.
October 29, 1929
Black Tuesday – Prices took the steepest dive in American history
Some $30 billion was lost that year alone

6. II. The Great Crash Banks in Tailspin
Market crash severely weakened banks.
Money had been lent to stock speculators
Invested money in the stock market
Bank runs and losses in the stock market led many banks to close

7. III. The Roots of Depression
Uneven Distribution of Income
Overproduction was a key cause of the Great Depression
A. Most Americans didn’t make enough money to buy up all the goods that were being produced. This leads to surplus, which leads to a reduction of prices, which leads to unemployment.
Consumer Credit
A rise in debt leads to consumers reducing their purchases and a low consumption of goods.

8. III. The Roots of Depression
Loss of Export Sales
Banks stopped loaning money to foreign companies, which led to fewer products being bought from American manufacturers.
Hawley Smoot Tariff – the highest tariff in American history
Damaged American sales abroad.
Harmed American companies and farmers

9. III. The Roots of Depression
Mistakes by the Federal Reserve
Federal Reserve was created to regulate money supply in the United States.
Throughout the 1920’s the FED kept interest rates extremely low, which
Encouraged banks to make risky loans
Led business leaders to think the economy was expanding, therefore they continued to borrow more money and expand production.

10. IV. Impacts Unemployment and Poverty
By 1933, more than 12 million workers were unemployed. 25% at the highest
Average family income dropped from $2300 to $1600
People often went hugry and many were evicted from their homes.
Breadlines and soup kitchens
Hoovervilles – shantytowns named after president Hoover.

11. IV. Impacts Environmental
Dust Bowl – terrible drought stuck the Great Plains in From the Dakotas to Texas, wheat fileds becames a vast dust bowl
Migrants began to leave the Great Plains in search of a better life in California. They became known as Okies.

12. Images of the Great Depression