Bellwork How does making more products lead to lower prices? What do you own if you own stock? What was the unemployment rate in the US during the Great Depression?

Great Depression Unit 12

I. Underlying Problems in the 1920s Declining demand and overproduction occurred in every major nation US agriculture collapsed Germany had hyperinflation Prices skyrocket 1 lb of bread cost 3 billion on Nov 1st, 1923 1 lb of bread cost 80 billion on Nov 15th, 1923*

I. Underlying Problems in the 1920s Most countries had a bad economic cycle start Workers stop buying goods Company make less Company lays off workers More workers buy less goods Company makes less Company lays off more workers And on and on and on…

CFU What caused the Great Depression? What is hyperinflation? Describe the bad economic cycle. Declining demand and overproduction Prices rise at an extreme rate Less buying, less profits, more layoffs, less buying, less profits, more layoffs, repeat

II. Stock Market Stocks could be bought on margin Investors could borrow using the stock they owned to buy more stock You have to pay back the loan no matter what Speculation led to inflated stock values and the crash Lots of sellers in October of 1929*

II. Stock Market Firms began to call in margin loans Investors had to sell at low prices to pay back loans Stock prices plunge “Black Tuesday” October 29, 1929, the bottom fell out WAS NOT THE CAUSE OF THE GREAT DEPRESSION!!!*

CFU How does margin buying work? What is the potential problem with margin? Why were investors getting lower prices? Black Tuesday was… You borrow money to purchase more stock You have to pay back the loan whether you make money or not The supply was high and demand low not the cause of the Great Depression!

III. Deeper in debt Federal Reserve raised interest rates If the Fed had lowered interest rates, the Depression MIGHT have been easier US passed Hawley-Smoot Tariff in 1930 Makes other countries stop buying US goods and place their own tariffs Less trading occurs when more was needed*

III. Deeper in debt Unemployment rate reached 25% in the US Those with jobs have wages cut Demand drops farther Runs on banks People go to the bank to get their money out People who are late get no money b/c it is already gone*

III. Deeper in debt

CFU What could the Fed have done to help & why? Why was the tariff a bad idea? Describe a run on a bank? Lowered interest rates to encourage spending It lowered the market for US goods People get all of their money out and the bank closes. If you are late your money is gone

IV. Turn around Franklin D. Roosevelt (D) of New York is elected in 1932 FDR immediately starts Relief, Recovery, & Reform measures known as the New Deal New Deal helped alleviate the suffering but it DID NOT end the Depression Massive spending on WWII ended it*

IV. Turn around In Great Britain a multi-party gov’t took over Slowly improved the economy and lowered unemployment Production was up by 1937 In France, they went through several gov’ts Coalition gov’t lowered unemployment, but companies raised prices to cover cost of wages France continued to struggle*

CFU What was the New Deal? What ended the Depression? Who took over in England? What happened when France lowered unemployment? FDR’s plan to end the Depression WWII spending A multi-party gov’t French companies raised prices negating the help

Great Depression Political Cartoons Analyze the Cartoons Answer the questions on a separate piece of paper. DO NOT WRITE ON THE DOCUMENT! Notes and Chapter 21 in the US textbook will help you. The first cartoon says : “ Orders 1928” & “Here was on from Jones and Co., says ‘Please ship fifty thousand of your new model’”

Depression Photo Gallery Look at each picture and answer the following about each set of pictures… Give details about what is happening in the picture What do these pictures teach you about the Great Depression? What is your emotional reaction to the photos? What could be done to help the people in the photos?

Make-up Work Work on any missing assignments you have. I need them today in order for them to go onto 4th Q Interim