1. The Great Depression

2. Business Cycle Economic Prosperity Bull Market Bear Market
Falling Prices
Economic Depresstion
Rising Prices
Bull Market
Bear Market

3. Bear Market: A general decline in the stock market over a period of time. It is a transition from high investor optimism to widespread investor fear and pessimism.

4. Bull Market: An increasing investor confidence, and increased investing in anticipation of future price increases

5. Causes of the Depression
High Tariffs
Availability of Easy Credit
Over Production
Unequal Distribution of Income
Over speculation
Crisis in the farm sector

6. High Tariffs Helped stifle world trade and hurt American businesses
Prevented other countries from selling their goods in the US
It prevented them securing the dollars that they needed to buy American products.

7. Availability of Easy Credit
In the 1920s people bought luxury items on credit paid for through installment plans allowing people to live beyond their means.
Business was expanding and the federal government failed to control bank loans
People were buying stock that had no value

8. Over Production
More goods were being produced than were selling (called stockpiling)
Wages were rising more slowly than production and prices of goods.
Credit concealed the fact that there was a decline in purchases.

9. Unequal Distribution of Income
If farmers had received better prices and workers had received higher wages the American people would have been able to purchase the surplus

10. Over speculation
Stocks were no longer being bought and sold on the bases of their current value
They were being bought on the assumption that they would go UP & UP!
Buying on the Margin: Borrowing money to help pay for the stock
So if a stock declined people who had “bought on the margin” had no way to pay off the loan

11. Crisis in the Farm Sector
Farms were auctioned off when farmers could not pay their mortgages.
Thousands of farmers lost their land
However on plus on farms was farmers could grow food for their families unlike the cities

12. Bank and Business Failure
Not long after the stock market crashed millions of Americans who had never owned stocks were affected.
Many people panicked and rushed the bank trying to
Many banks began to close because they could not return depositors’ money

13. Black Tuesday On October 29th 1929 The Bottom fell out of the market.
Investors raced to sell their stocks
This signals the beginning of the GREAT DEPRESSION

14. Hawley-Smoot Tariff
Designed to protect American farmers but had the OPPOSITE effect
The tariff prevented other countries from earning American currency to buy American goods.
Farmers could no longer export goods to Europe thereby making unemployment worse.

15. Worldwide Shock Waves
As a result of the collapse of the American economic system it led to a worldwide depression.
International trade slowed down as a result of the high protective tariffs
EX: The Smoot-Hawley Tariff

16. The Dust Bowl
Plowing had removed the thick protective layer of prairie grasses.
Farmers exhausted the land through overproduction of crops.
Areas that became known as the DUST BOWL
Kansas, Oklahoma, Texas, New Mexico, Colorado

19. During the Great Depression there was a drastic rise in the homeless: men who were laid off and lost their homes.
Many became hobos: Men & Boys who rode the rails as they searched for work
Every day men would set out from home and walk the streets in search of jobs. Some became so discouraged they simply stopped trying, some even abandoned their families.

20. Mental and Physical Results
Many people were physically and mentally impacted.
Their health declined as a result of poor diet and anxiety
People were demoralized and lost their will to survive
The Suicide rate rose more than 30
3 times as many people were admitted to state mental hospitals