The Great Depression 1929 - stock market collapsed sent shock waves throughout the world.

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Presentation transcript:

The Great Depression stock market collapsed sent shock waves throughout the world

boom-and-bust before the 1930s the American economy was largely unregulated thus it was prone to swings in the Business Cycle

lending/borrowing of money many nations borrowed money from the USA when the stock market crashed they could not pay the loans countries adopted high tariff policies to protect their economies this further reduced world trade

supply-and-demand global overproduction of food = falling food prices many farmers went bankrupt this harmed the USA and world economies

Buying Stocks on Margin people borrowed money to purchase shares in companies when the price of shares went down, they still had to pay back their loan ie. 10,000 shares bought at $1/share cost $10,000 borrow the money to pay. if the share price fell to 1¢/share your stocks would be worth $100 but you’d still owe $10,000

Roosevelt’s New Deal a shift to the left government intervention to solve the economic problems caused by the Great Depression Keynesian economics in practice

Franklin D. Roosevelt (Theodore Roosevelt’s distant cousin) was president of the United States from He was the first to implement Keynes's theories in a practical way He implemented massive public works programs to put people to work He called it the “New Deal,” an echo of Theodore Roosevelt’s “square deal.” This represented the beginning of a shift to the welfare state and a mixed economy (capitalism with government intervention) The “New Deal”

Prohibition of alcohol in the USA began in 1920 Designed to solve social problems and improve health Created organized crime, bootlegging, illegal speakeasies, dangerous moonshine

Speakeasy in Butte Montana

FDR and Prohibition repealed in 1933 fight the gangsters

A Popular Move Photo shows people lined up to buy liquor licenses in New York City Tax revenue went up in a depression!

The Welfare State

Alphabet Programs/Agencies EBA CCC TVA NRA SSA

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Emergency Banking Act allowed the government to regulate all banking activities

Civilian Conservation Corps employed millions of young Americans in conservation projects like reforestation

Tennessee Valley Authority created a series of dams in the Tennessee Valley to provide electricity, flood control, and irrigation

National Recovery Authority regulated prices and wages in industry

Social Security Act (1935) introduced unemployment insurance and old- age pensions

The Depression Years: Canada in the 1930s Read pages 2-11, 26-31, How did Canadian governments try to deal with the depression? 2. How did some people respond to the government actions? 3. What alternative political parties came about as a result of the depression? What were some of their solutions to the problems of the depression?