The Great Depression

Review Terms: Stock Shares in a company (part ownership) Credit Wall Street Shares in a company (part ownership) Buy now, pay later Where stocks are bought and sold

New Key Terms: Speculation - Buying and selling stocks to make a quick profit. Buying on Margin – buying stocks on credit Black Tuesday/Crash of 1929 – a date when stocks fell sharply, causing the Great Depression Depression – a sharp downturn in the economy

Steps to the Great Depression Create a 10 box flow map to fill in the steps as we go.

Step #1: Many Americans began to buy stocks on Margin (credit) hoping to get rich quick.

Step #2: Stock begin to fall, and people panic (People lost confidence in the market…sound familiar?)

People begin to sell their stock, at cheap prices, just to break even. Step #3: People begin to sell their stock, at cheap prices, just to break even.

Step #4: Stock prices continue to fall further because more people want to sell stock than buy it.

The Stock Market Crash of 1929 (aka “Black Tuesday”) occurs. Step #5: The Stock Market Crash of 1929 (aka “Black Tuesday”) occurs.

Step #6: Banks began to demand that people pay back money they had borrowed to buy stocks on margin.

Step #7: Banks begin to lose, or run out of, money because people can’t repay their debts.

Step #8: People began to panic and close their bank accounts before the banks ran out of money.

Since banks could not pay their investors, they closed. Step #9: Since banks could not pay their investors, they closed.

Step #10: Millions of Americans, even ones who did not invest in the stock market lost all of their money. This caused the Great Depression.

Life During the Depression

Breadlines – people waiting for free food

Hoovervilles/Shantytowns: Shacks set up into small villages during the Great Depression.

Dustbowl – dust storms caused by droughts in the Midwestern US

Unemployment:

Ending the Great Depression

The president who helped end the Great Depression was Franklin D The president who helped end the Great Depression was Franklin D. Roosevelt. His plan of action was called the New Deal

The New Deal The New Deal had 3 main goals (the 3 R’s): Relief Recovery Reform

New Deal Programs of Significance: Works Progress Administration – Created jobs for Americans

The Lincoln Tunnel

New Deal Programs of Significance Cont’d: Federal Deposit Insurance Corporation – Protects your money in insured banks.

New Deal Programs of Significance Cont’d: Social Security Act – Provided Workers with unemployment insurance and retirement benefits.