Learning Target: #1 What caused the Great Depression? What steps were taken by the federal government (congress, president Hoover and FD Roosevelt) to fight the economic crisis? Answer the questions at the end of this power point and turn them in with handout #1

 The Great Depression was a time in USA history when many people, companies and nations lost large amounts of money.  Stock market crash- Buying on Margin and Over speculation  Banks collapse (run on banks)  Overproduction of expensive goods  Employees wages decrease or  Layoff workers = Extremely high unemployment  High tariffs caused low demand for goods  Federal reserve keeps interest rates low Causes of the Great Depression

 Stock Market Crashes The rise before the fall  The 1920’s create a lot of success for USA  New inventions led to new companies which resulted in new stock for purchase  From 1920 to 1929 stock prices soared = Bull Market (long period of time were the stock prices rise)  Investors began buying stocks on MARGIN (payment plan for buying stocks)  Problem: People bought stocks but didn’t have the money to pay it back if the stocks fell  Investors also began over speculating on stock prices (buying stocks on a guess that the price of the stock would increase) The fall  October 29, 1929  Black Tuesday  Stock prices drop  People lost millions

 More issues with the economy Banks collapse  Banks had lent money to stock investors  When the stock market crashed the investors couldn’t pay their loans = banks lost money  Banks had invested depositor’s (people’s) $$ in the stock market  When the stock market crashed the bank lost all those peoples money  Banks closed  People afraid their bank might close made “bank runs”- lots of people withdraw their money from a bank at the same time Over production causes wage cuts and unemployment  Factories were able to produce a lot of stuff in the 1920’s  Factory owners did not increase wages  People bought expensive things on installment plans  When people could not pay all bills they cut back on stuff  When people cut back on stuff and companies have an overproduction of stuff  This caused factories to cut wages and lay off workers (high unemployment)

 More issues with the economy High Tariffs = High Taxes  Foreign countries stopped buying American made goods because of high tariffs Effect  Slowed USA production of goods down even more = more lay offs= more unemployment = less people spending money Federal Reserve mistake  The federal reserve is the main USA bank  When the economy began to slow the Federal Reserve kept loan rates low Effect  People/companies kept borrowing money = banks lost more money

 USA has the Great Depression  &feature=player_detailpage &feature=player_detailpage

 What steps were taken by the federal government (congress, president Hoover and FD Roosevelt) to fight the economic crisis?

  He hoped to down play the depression. He was against giving government money to the poor families.  He called business leaders (factory, railroad, other owners) to voluntary act – not lay off people  The business owners did this for 1 month  Hoovers next step was to increase public works (government funded building projects)  He hoped this would replace some jobs lost in the private sector (factory jobs)  Hoover set up the National Credit Corporation to help troubled banks loans money (1931)  Hoover set up Reconstruction Finance Corporation so the government could loan money to business, banks, railroads and agricultural (1932) President Hoover’s Actions

 The depression hurts

  Farmers revolt- stop growing crops, burn crops, destroy crops (corn, wheat, milk)  People protest, march, broke into grocery stores, join communist rallies to overthrow government  WW1 veterans march to get $1,000 bonus from government  Congress failed to approve  Protesters camped out and the government sent in the National guard to forcefully remove Hoover failed to be reelected. Americans angry

 Franklin Delano Roosevelt The New Deal

 Roosevelt & New Deal  In his inaugural speech, “First of all let me assert my firm belief that the only thing we have to fear is fear itself.”  First 100 days as president Roosevelt & congress pass 35 laws = The New Deal  1 st - Bank holiday = close banks  Said banks were safe  2 nd – Securities and Exchange Commission  Watch stock market  Get involved in private investing  Provide insurance to banks to protect individuals bank accounts

  The following programs put people to work or provided other assistance  Tennessee Valley Authority – built dams for flood control and electrical power  Civilian conservation corps – gave jobs to men in the forest  Agricultural Adjustment Act – paid farmers to not grow certain crops to increase prices so farmers could make money  Federal Emergency Relief Agency – let the federal government give state governments money to help the unemployed  Public works and Civil works administration – gave people constructions jobs (schools, roads, airports, parks, bridges) er_detailpage Roosevelt creates many programs to help the poor

 1.What was the great depression? 2.What was going on with the stock market in the 1920’s? 3.Why were buying on margin and over speculation a problem? 4.What was black Thursday? 5.Why did the banks fail? What events happened to cause the banks to fail? 6.Why were installment plans a problem? 7.Why did other countries stop buying USA made products? And why was this bad? 8.List three things President Hoover did that he thought would help the USA during the great depression. 9.Why were the American people angry? 10.What was the new deal? 11.List three things President Roosevelt did to help the USA during the great depression. Questions