“Have you an automobile yet?” “No, I talked it over with John and he felt we could not afford one.” “Mr. Budge who lives in your town has one and they are not as well off as you are.” “Yes, I know. Their second installment came due, and they had no money to pay it.” “What did they do? Lose the car?” “No, they got the money and paid the installment.” “How did they get the money?” “They sold the cook-stove.” “How could they get along without a cook stove?” “They didn’t. They bought another one on the installment plan.” Overheard conversation related to President Coolidge Make a prediction: What will eventually happen to Mr. Budge’s family? Explain yourself!

Describe how this woman must feel. Describe what the children must feel. What would make someone appear so broken? Have you ever been “broken”…if so, what made you feel that way?

s The Great Depression

Outcomes: Unit 7 The Great Depression 1. What were the causes of the Great Depression? 2. What effects did the Great Depression have on Americans? 3. How did the government expand its role to meet the challenge of the Depression?

Causes Over-optimism of the 1920s

Over-Optimism in the 1920s

Stock speculation- stock market inflated (Price of stock is higher than its real value) Banks gambling peoples’ savings on stocks Banks loan $ to people to invest Stock market crash causes thousand of banks to close Businesses and Agriculture overproducing, can’t sell their goods Over-optimism of the 1920s:

Speculation in stock market Over-optimism of the 1920s: Stock speculation- stock market inflated (Price of stock is higher than its real value)

Dow Jones Industrial Average, The Stock Market Crash of 1929 Over-optimism of the 1920s:

Bank failures Over-optimism of the 1920s: Banks gambling peoples’ savings on stocks Banks loan $ to people to invest Stock market crash causes thousand of banks to close

Overproduction: What happens if there’s too much supply? Over-optimism of the 1920s: Businesses and Agriculture overproducing, can’t sell their goods

Causes Over-optimism Government Action and Non-action

Action: Tax cuts to wealthy, taxes increase to middle & working class Non-action: “Laissez Faire” policies. In 1920s, government doesn’t regulate businesses, banks or stock market Non-action: no “safety net”-no unemployment benefits, no food stamps, etc.

These factors cause poverty and unemployment

Men waiting in line for work. Children looking for food.

Unemployment and Breadlines

Causes Over-optimism Government Action and Non-action Decline of the Farming Industry

Decline of Farming Industry Overproduction: low prices or can’t sell food Farmers in debt: bought machinery on credit. Can’t pay installments Banks foreclose on farms: take over their property Drought and “Dust Bowl”: leads to more poverty

Areas affected by the dust storms…this area known as the “Dust Bowl.”

A Dust Bowl storm on the American Great Plains

Causes Over-optimism Government Action and Non-action Gap between Rich and Poor Decline of the Farming Industry

Gap between rich and poor : average worker pay increases 9%, but rich Americans’ pay increases 75% By 1929, 60% of Americans living below poverty line ($2000/year), buying goods on credit