Objectives -TSW analyze causes that lead to the Great Depression of the 1930s.

Stock Market Crash to World War II The Great Depression Stock Market Crash to World War II

GREAT DEPRESSION a time between 1929 through the 1930’s when the entire world suffered from a poor economy. No jobs/money/spending

Great Depression Facts Millions of people in the United States (and around the world) had no jobs. At its height, 1 out of every 4 were unemployed. World wide (global) Countless people became homeless. Families often separated as parents and older children tried to find work.

Facts (cont.) In the early years of the depression in the United States, over 250,000 children were homeless. About 90% of these children were malnourished, (unhealthy because they didn’t have enough food / vitamins.) Nearly 3 million children had to drop out of school because their families needed them to work OR because their schools closed down. In some cases, children were paid barely more than 50 cents a week. Wages were as low as 2 cents an hour.

Causes of Great Depression Too much installment buying (buying on credit) Not enough money in circulation (gold standard) Over speculation in the stock market, crash of 1929 Overproduction by American industry and farmers High tariffs prevented free trade among nations WWI reparations and debts Low wages kept buying power low

Because of the Great Depression, businesses could not afford to pay their workers, so they had to fire people. Normally when people lose a job, they get another one. During the Great Depression, however, there were no other jobs because almost all businesses were firing people, and NO businesses were hiring. Thus, people couldn’t find work, and they couldn’t make money.

A Vicious Cycle When people lose their jobs, they stop spending. When people stop spending, more businesses close. When those businesses close, more people lose their jobs. When people lose their jobs, they cannot pay for their houses. When you can’t pay for your house, the bank takes it- -you are homeless! When the banks can’t collect their money or sell repossessed homes, they shut down. If you had money in the bank when it shut down, you lost it.

FINALLY--A TURNING POINT When did things finally start to get better? The stock market crash of 1929 burst a lot of bubbles, and the banking sector seized up. As the then-President and Congress understood things, it was best for the government to keep its hands off the economy and let the markets straighten themselves out. By 1932, though, things hadn't straightened out, but rather kept getting worse. FDR and the Democrats swept into power on the promise of Doing Something. The Something he promised, was billed as the New Deal.