1. Unit 7: The Great Depression
2.7.18

2. Entry Task
Free Write:
America is a country in which…

3. The Plan Lecture & video clips Notes in your notebook
Answer the questions for the video
Objectives today:
Have a clear understanding of the causes of the Great Depression
Analyze and evaluate the response to the Great Depression of two Presidents

4. The 1920s Stock Market surges
In 1925, the value of all stocks was $27 billion
By October of 1929, stock values were $87 billion
Many people thought everyone would become rich
Think back to the simulation:
If people thought the stock market would continue to go up forever, what would that lead them to do?
Graph of stock market in 1920s

5. But underneath the wealth…
there were warning signs that all was not well.

6. Warning Signs 1. Wealth Inequality The Rich:
Huge corporations – not small businesses – were succeeding
In 1929, 0.1% of the population had 34% of the country’s total savings
Secretary of the Treasury, Andrew Mellon, gave the largest tax cuts to the wealthiest Americans

7. Warning Signs 1. Wealth Inequality The Poor:
71% of individuals and families earned less than $2,500 a year
80% of families had no savings

8. Warning Signs 2. PERSONAL DEBT
People believed that America was becoming more and more prosperous
They started buying more, and going into debt

9. Warning Signs 3. SPECULATION
Speculation: Making high-risk investments, hoping to get a huge return
Buying on margin: Investors could purchase a stock for a fraction of the price (10-50%) and borrow the rest. If the stock went up, people could make lots of money.

10. Warning Signs 4. FARMERS AND WORKERS STRUGGLE Farms struggled
Farms couldn’t repay money to banks
6,000 rural banks failed during the 1920s
Factory workers also struggled
Many worked many
hours for little pay

11. In the Stock Market…
In 1929, prices in the Stock Market reach an all-time high
But a few worried investors started to sell
This led many people to follow their example
Think back to the simulation…
Why might stock owners want to sell when they saw others selling? What were they afraid of?

12. BLACK TUESDAY October 29, 1929 16.4 million shares traded
Market collapses

13. Effects of the Crash 1. Risky loans hurt banks
2. Consumer borrowing bankrupted people
3. Bank runs bank failures
>People all ran to the bank to withdraw their money
>Banks collapsed, people lost everything
Ultimately…
The Stock Market Crash leads to the Great Depression
Risky loans: Banks lost money b/c business and personal loans defaulted (couldn’t be paid back)
Borrowing: Borrowers couldn’t pay back banks
Bank runs: People withdrew all their money from banks, this led to failures of banks
Savings: 9 million savings accounts vanished

14. The Century: Decades of Change
0:00-9:11
14:28-16:00
Episode 4: Stormy Weather

16. After the crash… Industrial production fell by 50%
12 million people were unemployed
Businesses closed, people had no money, families starved or scraped by

17. The Century: Decades of Change
24:55-41:19
Episode 4: Stormy Weather

18. Hoover’s Response
Hoover believed charity & government programs would just make people dependent
He believed that government shouldn’t intervene to help businesses either
Instead, he predicted that things would get better if everyone worked hard and pitched in

19. Play speech (2 min): http://www. history

20. When FDR came into office…
¼ of the nation’s workforce was unemployed
¼ million families had defaulted on their mortgages
1.2 million Americans were homeless
FDR elected in 1932
Promised to help people

21. FDR Enacted The New Deal
FDR demanded "broad executive power to wage a war against the emergency, as great as the power that would be given me if we were in fact invaded by a foreign foe."

22. Hoover Presidency FDR’s Presidency 1929-1933 1933-1945

23. FDR’s Fireside Chats
FDR began weekly radio addresses called “fireside chats”
In these addresses he tried to reassure and unite the nation
He explained parts of the New Deal and his policies to the American pe0ple
Play video:

24. The First 100 Days
In FDR’s first 100 days in office, he pushed 15 major bills through Congress
Reshaped every aspect of the economy – from banking and industry to agriculture and social welfare
He called his approach “The New Deal”