The Coming of the Great Depression

The Stock Market Crash This practice along with other causes led to… October 29, 1929  BLACK TUESDAY In early 1928, stocks began a steady climb for 1 ½ years This is called a BULL MARKET The crash of the stock market was the first visible sign of a disaster that had been building for years. Dow Jones (an index of stocks) fell 43% This practice along with other causes led to… I got a fever!!! Guess What???!!! Think of “more cowbell” as more speculation, more credit, and more investing!!! The rapid growth made “easy” money possible and infected Americans with speculative fever  people were able to get easy credit Normal American

What would you do? If there was a way to make easy money with hardly any risk, would you do it?

Capitalist Economy Oct. 29, 1929 (Black Tuesday) 1920s

Causes of the Depression The U.S. had experienced economic downturns (roller coaster drops) before like the Panics of 1819, 1837, 1893, 1907 and the Postwar recession of 1919…What made the Great Depression the worst of them all? Lack of Diversification Unequal distribution of wealth Credit structure of the U.S. European War Debt Economy linked to the automobile industry (and the construction industry) Corporate profits grew however purchasing power of workers did not Many people defaulted on their loans which hurt bank European nations had huge amounts of debt to the U.S. Industry began to decline similar to the railroad industry in 1893 Not proportionate Large banks were investing recklessly in the stock market Europe had less money to buy American goods

Progress of the Depression I’ve got the power!!! Banks either went bankrupt or closed their doors Companies were forced to reduce prices American Consumer No you don’t!!  The money supply dropped causing a decrease in purchasing power and deflation American workers lost their jobs