1. Causes of the Depression

2. Farmers Demand down on farm items end of war Europeans not buying food
New synthetics (rayon) lower demand for cotton

3. Farmers Supply Up Lowers prices for farm goods
New ag. methods and equipment increased production
Lowers prices for farm goods

4. Mining & Industry
New industrial methods
assembly lines, new equipment

5. Mining & Industry
increased production-more consumer goods

6. Mining & Industry 1. between 1923-1929 production up 32%
2. Require less workers
-wages only increase 8%
3. Corporate profits up 62%
-not invested in company, but into stock market
4. Workers could not afford new goods, so they borrowed money for the goods
5. People were spending large amount of money on non-consumable goods.
6. US puts tariffs on European goods, so Europe put tariffs on US goods, leading to drop in US sales of goods overseas

7. Banks Banks are lending out a lot of money
lending money to Middle Class & Poor to buy goods
lending money to Europe

8. Banks
lending money to stock buyers to buy on Margin

9. Stock Market
Many stocks are bought on margin-with profits going back into market

10. Economic Terms
Buying stocks on margin –paying a small down payment, borrowing the remainder of the money, buying stocks using the stocks you are buying as the collateral for the loan.

11. Stock Market Speculation buying drove up Stock prices
Speculation: buying and selling stocks in hope of making a quick profit.

12. The CRASH
Buying stock at ever increasing rates on speculation:

13. The CRASH Buying stock at ever increasing rates on speculation:
(buying and selling stocks in hopes to make a quick profit)

14. The CRASH Buying stock at ever increasing rates on speculation:
(buying and selling stocks in hopes to make a quick profit)
Buying on Margin:

15. The CRASH Buying stock at ever increasing rates on speculation:
(buying and selling stocks in hopes to make a quick profit)
Buying on Margin: (pay a down payment and borrowing the rest)
Margins work as long as the

16. The CRASH Buying stock at ever increasing rates on speculation:
(buying and selling stocks in hopes to make a quick profit)
Buying on Margin: (pay a down payment and borrowing the rest)
Margins work as long as the price goes up

17. The CRASH Buying stock at ever increasing rates on speculation:
(buying and selling stocks in hopes to make a quick profit)
Buying on Margin: (pay a down payment and borrowing the rest)
Margins work as long as the price goes up
If prices fell, borrowers couldn’t afford to __

18. The CRASH Buying stock at ever increasing rates on speculation:
(buying and selling stocks in hopes to make a quick profit)
Buying on Margin: (pay a down payment and borrowing the rest)
Margins work as long as the price goes up
If prices fell, borrowers couldn’t afford to pay back the loan.

19. The CRASH Oct 21st banks start calling in margin loans
Sept 3, 1929 stock price reach high point
DOW HIT 381pts (what is it today?)
Sept 4 prices start to drift down
Oct 21st banks start calling in margin loans
Call in $150 million in loans
People must repay loans-to pay off loans they must sell the stocks-Panic
Oct 23, prices drop sharply
Oct 24, record 12.9 million shares traded
DOW drops 21%
Banks pour in money to hold up market
Oct 29, 1929 BLACK TUESDAY, investors sell 16.4 million shares at huge losses (drops 23% more). CRASH OF 1929 ( 30 billion dollars disappear!!!!

20. By Nov. many industries stocks lose 50% of value. Some as high as 80%
By Nov. many industries stocks lose 50% of value. Some as high as 80%. Some are worthless.

21. Dow Monthly .

22. Dow Weekly .

23. Banks wanted loans repaid people can’t repay the loans.
People could not repay loans
Banks run short of money
This leaks out
people flock to banks to get money out
Bank run .

24. .

25. Bank Closures the banks run out of money- Banks close
By 1933—9,000 banks will go out of business,

26. People are in a panic and stop spending money

27. More business start to lay people off
. More business start to lay people off. Huge unemployment —25% unemployment nationwide

28. .

29. People without jobs lose their homes and farms GREAT DEPRESSION.

30. Food Lines & Farm Auctions.

32. What gets us out of the Depression
WW II