Economic Collapse Grade 8 Chapter 7-1

Stock market crashes! After the prosperity of the 1920s, the world went into a financial crisis in the 1930s. The Great Depression The Myth of Prosperity

Economic Depression Terrible economic slump. Worldwide Caused by failing industry which was fueled by credit.

The money is not all there. Run on the banks After the collapse of the stock market, many Americans immediately ran to banks to withdraw all of their money. The money is not all there. Banks loan out your money and pay interest to you in return. This money is lent out to invest in businesses or to individuals (houses, cars etc.) Subsequently, banks had no more money to loan and businesses began to close.

Unemployment Banks had no money to loan for new businesses. Many businesses had closed due to supply and demand Unemployment skyrockets As bad as our economy has been lately, you have never seen an unemployment line like the one shown here.

Supply and demand As supplies of an item increase, the demand is met and thus decreases. During the 1920s, new machinary and assembly lines turned out large amounts of goods. These goods subsequently had no demand as needs were met.

Farmers began leasing large equipment to maximize production. Farming Farmers began leasing large equipment to maximize production. As we saw with supply and demand, large amounts of food was cultivated. Since supply was increased and demand decreased, farmers began to lose money and fall into debt. The new equipment could not be paid for and slowly farmers lost homes and jobs.

Illusion of Wealth Much of the wealth of the 1920s was not as real as it seemed. People relied heavily on credit and began living beyond their means. As the depression worsened, people continued to rely on credit and created large amounts of debt for themselves.

For Hoover it was “too little, too late.” Public Works Projects Herbert Hoover began creating public works projects such as the Bay Bridge in San Fransisco Public Works Projects provide a nation with needs and the unemployed with jobs. For Hoover it was “too little, too late.”

The hoover dam

It dams the Colorado River (Grand Canyon) The hoover Dam Considered by many to be Hoover’s crowning achievement, the dam created electricity for expansion of west coast cities. Cities like Los Angeles and Las Vegas would not be possible without the massive amount of energy created by the Hoover Dam. It dams the Colorado River (Grand Canyon) http://www.youtube.com/watch?v=GLs3H_0yfKw

Often built near public works projects for shelter. Hooverville A small tent village called so because the need for such dismal conditions was blamed on president Hoover. Often built near public works projects for shelter.

Bonus Army For their service in WWI, many soldiers were promised bonuses from the selling of war bonds. The money was due in 1940, but veterans sought out the money prior to this due date.

Legacy Although not his fault, Hoover had lost the faith of Americans who saw prosperity in the 1920s during the depression era. His public works projects were a forerunner to future endeavors by his successor Franklin D Roosevelt.