1. The 1920s 1)The 1920s became known as the “Jazz Age” Louis Armstrong

2. The 1920s 2) During and after WWI the U.S. was experiencing an incredible economic boom

3. Herbert Hoover 1) Hoover was elected President in 1928

4. Herbert Hoover 2) He was a Republican and believed that the government should not use laws to regulate the economy 3) However, economic growth during the 1920’s was dangerously rapid and unstable

5. The Stock Market Crash of 1929 1)From 1925-1929 the average value of all stocks tripled 2) In 1929 the stock market crashed and prices plummeted

6. The Stock Market Crash of 1929 3) Many investors lost their life savings

7. CAUSES OF THE GREAT DEPRESSION Cause # 1 = Over- Speculation Cause # 2 = Failures of the Federal Reserve Cause # 3 = High Protective Tariffs

8. Cause # 1 = Over-Speculation 1) Speculation is engaging in a risky business venture on the chance that a quick or sizable profit can be made 2) Many people during the 1920s began to heavily speculate in the stock market

9. Cause # 1 = Over-Speculation 3) Many investors commonly bought stock ‘on margin’ which meant that they only paid for part of the stock and borrowed the rest 4) People who brought stocks on margin did so because they knew the price of the stock would go up

10. Cause # 1 = Over-Speculation 5) Over speculation became very popular and stock brokers and banks were lending out huge sums of money and this made the stock market and the economy very unstable

11. Cause # 1 = Over-Speculation 6) In 1929 the stock market crashed. The prices of stocks plummeted and barrowed money could not be paid back and many banks failed

12. Cause # 2 = Failures of the Federal Reserve 1) The Federal Reserve (The FED.) was established as a federal agency to control and regulate the nation’s banking system and the economy 2) The Federal Reserve failed to prevent banks and stock brokers from lending out too much money during the 1920s

13. Cause # 2 = Failures of the Federal Reserve 3) This led to the failure and foreclosure of one forth of the banks in the US

14. Cause # 2 = Failures of the Federal Reserve 4) This also led to a severe contraction in the nation’s supply of money in circulation

15. Cause # 3 = High Protective Tariffs 1)Tariffs are taxes that are added to imported goods. They are designed to protect industries and businesses in the U.S. 2) In response to the U.S. tariffs, the countries of Europe raised their own tariffs TRADE

16. Cause # 3 = High Protective Tariffs 3) Tariffs interfered with world trade because they destroyed foreign markets for American products 4) The Hawley Smoot Tariff was passed in 1930 and was one of the highest tariffs in U.S. history 5) This tariff only made the Depression worse

17. IMPACT OF THE GREAT DEPRESSION

18. 1) Bank Failures A) When the Stock Market crashed people rushed to the banks to withdraw money B) Because the banks loaned out so much money they could not pay everyone when they came to withdraw their money

19. BANK FAILURES 1929-1933

20. 1) Bank Failures C) This caused 1000s of banks to close and many Americans lost their life- savings D) The U.S. financial system collapsed because the Federal Reserve failed to regulate banks and the stock market

21. 2) Unemployment and Homelessness A) At the height of the Depression 25% of Americans were unemployed

22. 2) Unemployment and Homelessness B) Cities and towns throughout the country established soup kitchens and bread lines as local governments tried to feed the poor

23. 2) Unemployment and Homelessness C) The unemployed soon were unable to pay their rents and were evicted from their homes

24. 2) Unemployment and Homelessness D) The number of homeless multiplied and they began to move into makeshift towns made out of scrap wood and tin shelters (These were called Hoovervilles)