Essential Declarative: Analyze 5 main causes of the Great Depression.
60 Minutes: Families in Cars http://youtu.be/L2hzRPLVSm4
Causes of the Great Depression 1. Over Production Industry Agriculture 5. Financial Panic 3. Unequal Distribution of Wealth 4. Stock Market Crash 2. High Tariffs & War Debts
Causes of the Great Depression 1. Farm Depression of the 1920s Prices of farm products fell about 40% by 1921 and remained low through the 1920s Farmers were producing more than American consumers were consuming Some farmers lost so much money they couldn’t pay the mortgage on their farm Farmers had to rent the land or move
Causes of the Great Depression 1. Overproduction in Industry Factories were producing products, however wages for workers were not rising enough for them to buy the goods Too few workers could afford to buy the factory output The surplus products could not be sold overseas due to high tariffs and lack of money in Europe
99% of the population received a 9% increase in their income, while the top 1% saw their income rise by 75%. 1,230,000 Americans 121,770,000 Americans
Causes of the Great Depression 2. High Tariffs and War Debts European nations owed $10 billion ($115 billion in current dollars) to the U.S. in reparations Their economies were devastated and had no way of paying the money back U.S. insisted on repayment. This forced the allies to demand Germany pay reparations imposed by Treaty of Versailles Europe could no longer purchase goods from the U.S. 1922, U.S. passed the Hawley-Smoot Act Instituted high tariffs on industrial products Other nations retaliated and world trade declined
Causes of the Great Depression 3. Uneven Distribution of Income Industrial productions increased about 50% but the wages of the industrial workers rose far more slowly As a result, these workers couldn’t buy goods as fast as industry produced them
How does this illustrate the problem with high tariffs?
How did $30,000,000,000 evaporate?
4. Stock Market Crash What were the causes of the 1929 stock market crash? What is “buying on the margin”?
4. Stock Market Crash: Speculation Investors would buy stock that they thought would quickly rise in value, once the price went as high as the investor thought it would go they sold.
4. Stock Market Crash: Buying on Margin Investors only had to put 5% of the stock value down; the stockbroker loaned the money they didn’t have
5. Financial Panic What is a bank run? Why did people lose faith in banks? How could this have caused the Great Depression? http://www.history.com/topics/great-depression/videos/1929-stock-market-crash
5. Financial Panic Banks loaned stock brokers money for the margin loans, they used the savings people had deposited in the bank for these loans. The savings was not insured.
Hoover’s Monetary Policy Who was the President of the United States at the start of the Great Depression? http://www.youtube.com/watch?v=6EB4xdUhVVw
The Crash: A Progression By August 1929, 6 billion loaned out Some investors realize market is saturated Investors begin to sell stock, causing prices to drop As prices drop, brokers call in their loans Investors do not have the cash to payoff the loans Brokers enforce sales of stock to payoff the loans Prices drop more, causing panic sales of stock Prices drop dramatically and money evaporates into thin air
Compared to Today: The Great Recession
Summarize One of the Causes of the Great Depression Use your notes and book to summarize one of the causes of the Great Depression. Compare that cause of the Great Depression with the Great Recession (you can use your phones for research). You can use page 570-576 in your books. Groups: 1. Over Production 2. Unequal Distribution of Wealth 3. High Tariffs and War Debts 4. Stock Market Crash 5. Financial Panic
Exit Question What do you believe was the main cause of the Great Depression? Give me two reasons why. Write at least three sentences.
Warm-Up On the sheet that I am handing out, please read the top portion and respond in the provided space. Get your notebooks out !!
Stations- Silent Activity In each folder there is a picture of people from the Great Depression. There is also a sheet with various quotes from various individuals. Please read the quotes to yourselves. Imagine what it would be like to live in the Great Depression. Would you have the same attitude? Try to read as many quotes as possible. Now, you will all come together as a group to draft a letter to President Hoover or F. D. Roosevelt (your choice). In the letter, be sure to include several specific examples of hardship. This is to be one whole page long. I am looking for passion!!!!!
Responsibilities If you have a club, then you are the group leader. You will make sure the group is progressing and assist with all jobs. If you have a spade, then you are the timekeeper. Please keep track of time and make sure your group is on task. If you have a diamond, then you are the writer. You will be working with all in the group to draft a letter (that you will turn into me) to President Hoover or Roosevelt If you have a heart (tee-hee), then you are the speaker for the group. You will assist the writer and present letter to class.
While others are reading… This is 7-11. Separate one sheet of paper into two parts: SOCIAL GROUP || Key Difficulties While one group is talking, you should name the social group they are speaking on behalf of and mark down key difficulties. This is part of your portfolio.
Your homework For your homework, read the chart describing programs of the Second New Deal in your textbook. This is found on page 613. For each program, write one sentence describing what the program was and who did it help. I’ll collect next class.