The Great Depression
1920’s Automobile Industry
1920’s Stock Market
Stock Market Crashing Sales down- Rumors of major Investors Withdrawing Money Optimism of Stock Holders Decreases Stock Prices Drop Stockholders Panic
Stock Market Crash 10/18/1929= 10/24/1929= 10/25/1929= 10/27/1929= 10/28/1929=
Stock Market Crash
Fractional Reserve System Person deposits $1000 into a Bank The Bank Loans out $900 dollars to People loaning money People who loaned money pay bank back plus interest ($900 X 5% = $945) Depositor takes $1000 out of Bank
Effects on Banks Wall Street Crashes- Banks Lose Investments Depositors lose savings on Wall Street- Go to Withdraw Money Bank fails because it doesn’t have all of the depositors money Depositors lose savings
Fractional Reserve System Bank Run
Automobile Industry during the Great Depression
Farm Failures Need to make up for losses Plant More Wheat To much wheat has been harvested Farmers income goes down
Dust Bowl Increase Wheat for WWIBad Farming PracticesDroughtTop Soil ErodesDust Bowl
Hopelessness of the Individual More Competition For Jobs More Need For Social Programs Local Programs couldn’t help everyone Beg or Steal to Survive Unemployment is up
Herbert Hoover
Hoover’s Economic Philosophy Bull Market Classical Economics Associative State
Franklin D. Roosevelt
The New Deal Stop The Banking Crisis Help Farmers Increase Aid To The Needy Reduce Unemployment Help Wall Street
Effects on Banks Wall Street Crashes- Banks Lose Investments Depositors lose savings on Wall Street- Go to Withdraw Money Bank fails because it doesn’t have all of the depositors money Depositors lose savings
The New Deal on Banking Bank Holiday Government Oversight on Banks Government Insured Peoples Deposits $1 Billion New Deposits in a Month
Stock Market Crashing Sales down- Rumors of major Investors Withdrawing Money Optimism of Stock Holders Decreases Stock Prices Drop Stockholders Panic
New Deal on the Stock Market Federal Securities Act Securities and Exchange Commission
Farm Failures Need to make up for losses Plant More Wheat To much wheat has been harvested Farmers income goes down
New Deal on Farming Give farmers a subsidy to plant less Better Farming Practices Increase Access to Electricity
New Deal on Unemployment Civilian Conservation Corps Tennessee Valley Authority National Industrial Recovery Act
The Second New Deal Works Progress Administration Social Security National Relations Labor Act
Supreme Court on “The New Deal” Parts of NIRA= Unconstitutional Tax to Support Farmer Subsidy’s= Unconstitutional
FDR on the Supreme Court 9 Judges Stop FDR Policy’s Appoint 6 More Judges To Tip Vote
Downward Cycle
Upward Cycle