1. The Great Depression
Chapter 9 – Section 1

2. CH.9 Great Depression
Sec.1: Causes of the Great Depression
- High stocks, overproduction & high tariffs, un even distribution of wealth and mistakes bade by the federal reserve led to the Great Depression
Sec.2: Life During the Depression
- A look at how people came to deal with the hard times during the depression
Sec.3 Hoover Responds
- Hoovers philosophy of government guided his response to the Depression

3. Big Idea
Following the presidential election of Herbert Hoover, most Americans were optimistic about the country. Stock prices were soaring as many people invested their life’s savings. As fewer people invested in the market, the market began to slow and finally in October 1929, the stock market crashed and with several other factors, the country fell into the what is known as the “Great Depression”.

4. Stock Market Stock = System of buying and selling shares of companies
Buying Stock = Investing in a company
You can buy a piece of any company on the market and be a % owner.
Stock Market

5. Bull Market 1920’s Market = Bull Market
Bull Market = long period of Rising stock prices
(Bear Market = period of Falling stocks)
1920’s prolonged bull market led many people to invest everything
Over 3 Million investing in market
Buyers engaged in “Speculation” – taking big risks – betting the market would continue to go up

6. Buying on Margin / Margin Call
Many investors began to buy on margin
Buy stock for only 10% of value
Remaining balance carried by stockbroker
Broker charged interest & commission
If stock price fell, broker placed a “margin call” to you!

8. Changing Market
Bull market lasted only as long as people invested in it
By 1929 market was running out of new investors
Heavy investors sensed danger and began to sell off stock hoping to minimize loses.

9. The Crash
Oct. 21, 1929 market was starting to fall – Major Margin Calls
Oct. 24 (Black Thursday) Market fell further
Oct. 29, (Black Tuesday), Market Crashed – Stocks lost $10 – $15 Billion dollars in value
By Nov – over $$$30 Billion was lost
Calculator

10. Banks in Tailspin Market Crash weakened banks 3 ways:
1. loaned $ to speculators
2. Invested deposits
3. Bank Runs
No protection for people savings or checking
Banks forced to close
Over 3,000 banks closed

11. Questions???