1. The Great Depression Causes and Impact

2. Remember… 1920’s were a time of optimism and spending. People wanted “stuff.” People use borrowed money to buy that stuff. People invest in stocks…..

3. CAUSES of the Depression 1.Stock Market Crash Black Tuesday, October 29, 1929 Stock prices dropped significantly

4. CAUSES of the Depression 2.Overspeculation on stocks. People used borrowed money (with low interest rates) which drove up the stock prices. They couldn’t pay back once stock market crashed on October 29, 1929.

5. CAUSES of the Depression 3.Bank failures 1930’s saw 9,000 banks close because Federal Reserve’s failure to prevent the collapse of the banking system. Surviving banks stopped giving out loans.

6. IMPACT of the Depression 4.Reduction in purchases made by people because they don’t have money Overproduction Production slows People lose jobs Less money in circulation Unemployment rose above 25%.

7. CAUSES of the Depression 5.Hawley-Smoot Act of 1930 America taxed imports on trade from other countries to protect U.S. goods. Goods from Europe stopped coming in because they can’t afford the tax. Less competition means higher prices in the U.S.

8. What happens to the country and the people?

9. IMPACT of the Great Depression Unemployment leads to poverty and homelessness “Hoovervilles” Shantytowns where people pieced together houses with whatever materials they could find (wood, tin, fabric, etc.). Named after President Hoover, who people thought was not doing a good job with the Depression. People wait in food and clothing and employment lines hoping for relief.

10. IMPACT of the Great Depression Bank closings People lose life savings. Little money in circulation.

11. IMPACT of the Great Depression Public Issues Labor Union violence Want better conditions and pay but often employers wouldn’t agree to their terms. The “Bonus Army” WWI veterans were promised a $1000 bonus in 1945 but because of the Depression they wanted it sooner. President Hoover and the Senate refused to grant them the bonus early. The veterans camped out in Washington D.C. and to get rid of them Hoover called in the army. The army aggressively removed the “Bonus Army.”

12. IMPACT of the Great Depression Foreclosures on farms which causes migrations. Due to drought and slow market. The “Dust Bowl.” Farmers had overused the Great Plains in the 1920s. A severe drought hit drying up the land even more. Dust storms created blackouts and caused death in some cases. Foreclosure – bank’s seizure of mortgaged property. Families move in the hope that they will have a future elsewhere.

13. How will the nation recover?