1. 1920s BOOM 1930s BUST Main Idea: The prosperity of the 1920s seemed
limitless…but 1929 would change
everything for everyone
Created By Mrs. Bedard PVMHS

2. What were the causes of the Great Depression?
1920s BOOM! To BUST
This Week’s Topic:
What were the causes of the Great Depression?
#1: Overproduction
#2: High Tariffs on Foreign Goods
#3: Mistakes were made by the Federal Reserve Bank
#4: Stock Market Crash
#5: Banks will close
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3. Created By Mrs. Bedard PVMHS
Where we are at:
Awesomeness!
1920s
New Industries
CRASH!
Speed Bump
1919
Depression
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4. What were the causes of the Great Depression?
Election of 1928  Herbert Hoover
How do we know him?
- Lead the food administration (ration) in WWI
“We are nearer to the final triumph over poverty than ever before!...I have no fears for the future of our country. It is bright with hope”
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6. Cause #1: Overproduction
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7. How did LACK PANTS cause Overproduction??
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8. Cause #1: Overproduction
Why did this happened?
What was the result?
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9. Americans are unemployed they can’t afford to buy anything
In the 1920s
Companies Overproduced
= too many goods
CAUSE:
Companies aren’t selling =
not making money
Layoffs = people
Lose their jobs
Americans are unemployed
they can’t afford to buy anything
businesses start to close.
RESULT:
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25% were
unemployed!
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12. Who did overproduction effect the most?
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THE DUST BOWL
“Quiet Depression” Farmers were poor even before 1929 stock market crash.
Why?
1.) During WWI, farmers went into debt trying to keep up with demand. Gov. encourages farmers to plant more so soldiers would have food. = by 1920 overproduction!
2.) Also, over planting destroyed the soil. Crops stopped growing…farmers could not afford to plant new crops. Fields of dirt laid unplanted.
3.) AND in 1932 = drought…Dakotas to Texas =Great Plains become known as the Dust Bowl.
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The Dust Bowl
Location: U.S.A, The Great Plains (Nebraska,
Oklahoma, etc.)
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18. What were the causes of the Great Depression?
1920s BOOM! To BUST
This Week’s Topic:
What were the causes of the Great Depression?
#1: Overproduction
#2: High Tariffs on Foreign Goods
#3: Mistakes were made by the Federal Reserve Bank
#4: Stock Market Crash
#5: Banks will close
Created By Mrs. Bedard PVMHS

19. #2: High Tariffs Tax on foreign products. Purpose = make US goods
Cheaper so people buy American
Created By Mrs. Bedard PVMHS

20. Now USA can’t sell goods at home
CAUSE:
American goods needed
To sell!
Hawley-Smooth Tariff = increased
the cost of foreign goods so that
people would buy American made.
Foreign nations raised the tariff on
American goods in their countries.
Now USA can’t sell goods at home
or overseas!.
RESULT:
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21. Created By Mrs. Bedard PVMHS
#2: High Tariffs
Remember it’s the
Hawley-Smoot Tariff!!
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22. #3: Mistakes made by Federal Reserve Bank
What is the Federal Reserve Bank?
Boston’s Branch
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23. #3: Mistakes made by Federal
Mistake #1: In the 1920s = Federal Reserve Bank kept interest rates on loans really low.
Problem??
Too many people borrowed money, it was cheap.
Went into debt.
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24. #3: Mistakes made by Federal
Mistake #2: Once the Depression hit in the1930s = Fed Bank raised all the interest rates on loans
Problem???
- When people lost their jobs, could not pay back loans.
- Now they needed to borrow $$ but couldn’t afford to.
Created By Mrs. Bedard PVMHS

25. In the 1930s people will need To borrow money! (Lost their jobs)
Money was cheap to borrow
throughout the 1920s…
People borrowed too much
CAUSE:
Federal Reserve Bank then raised
the cost to borrow money…
In the 1930s people will need
To borrow money! (Lost their jobs)
BUT now it is too expensive to borrow.
RESULT:
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26. Things you should know about using Credit!
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Debit v Credit??
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#4: 1929 Stock Market Crash
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29. How does the stock market work? Company opens
# Stock Market Crash
How does the stock market work?
Company opens
They allow you to buy “stock” (a piece of the company) = they use your money to help company grow (buy things/make things)
Company does well = they pay you!
Company does bad =
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30. #4: 1929 Stock Market Crash Why did the Stock Market Crash in 1929?
1.) 1920s Stock Market Confidence leads to a
BULL MARKET:
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31. RESULT= PANIC! Sell, sell, sell #4: 1929 Stock Market Crash
Why did the Stock Market Crash in 1929?
2.) In the 1920s people started borrowing money to buy stocks = buying on margin
Problem??
3.) Margin Call: once market started to stall = people who borrowed money had to sell quick in order to pay back the loan.
RESULT=
PANIC!
Sell, sell, sell
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32. October 29 1929 – Black Tuesday
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#5: Banks Closed
Clip from
It’s a Wonderful Life
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36. #5: Banks Closed / All Savings Were Lost!
1.) Banks invest your money:
- Loans to other people/businesses
- Stock market
2.) When people stopped paying back loans they
stopped paying your back your savings!
3.) Caused Bank Runs = people ran to their bank
to withdraw money before it was gone.
4.) Banks closed their doors…had no money!
Created By Mrs. Bedard PVMHS

37. Created By Mrs. Bedard PVMHS
It’s a Cycle!
Overproduction
Loss of
Buyer
(unemployed)
Loss of
Buyer
(savings gone)
Raise Tariffs
Banks Close
Loss of
Buyer
(no trade)
Loss of
Buyer
(in debt!)
Mistakes Federal Bank
Stocks Crash
Loss of
Buyer
(no credit)
Created By Mrs. Bedard PVMHS

38. Created By Mrs. Bedard PVMHS
1.) Why is laissez-fair good for economic growth? How is laissez-fair bad for economic growth?
2.) How did the car industry help create an awesome economy in the 1920s?
3.) How did purchasing items on credit effect the consumer society in the 1920s?
4) Why did people start to lose their jobs in the 1920s
5.) Why was the Hawley-Smoot Tariff a cause of the Great Depression?
Created By Mrs. Bedard PVMHS