1. Causes of the Great Depression
Overview: Great Depression in the United States, worst and longest economic collapse in the history of the modern industrial world, lasting from the end of until the early 1940s. Beginning in the United States, the depression spread to most of the world’s industrial countries, which in the 20th century had become economically dependent on one another. The Great Depression saw rapid declines in the production and sale of goods and a sudden, severe rise in unemployment. Businesses and banks closed their doors, people lost their jobs, homes, and savings, and many depended on charity to survive. In 1933, at the worst point in the depression, more than 15 million Americans—one-quarter of the nation’s workforce—were unemployed.
CAUSE
Description of Cause
Stock Market Crash
Bank Failures
Dust Bowl
Hawley Smoot Tariff
Buying on credit
Reduction in Purchasing
Gap Between Rich and Poor
How could this have been prevented?
Mrs. Sandoval-ERHS

2. Causes of the Great Depression Poster
Directions:
Each group has a packet about the 7 causes of the Great Depression. With this information you will need to complete the handout provided and INDIVIDUALLY create a poster for the 7 cause of the Great Depression (1 poster per person)
Poster Requirements:
A title written neatly on the top, bottom, or middle of page
Description for each of the 7 causes of the Great Depression (1930s)
Visual for each cause
Must be in FULL COLOR 
1 Poster per person (group is just sharing packet)
Mrs. Sandoval-ERHS

3. Stock Market Crash
During September and October a few firms posted disappointing results causing share prices to fall. On October 28th (Black
Monday), the decline in prices turned into a crash has share prices fell 13%.
Panic spread throughout the stock exchange as people sought to unload their shares.
On Tuesday there was another collapse in prices known as 'Black Tuesday'.
Although shares recovered a little in 1930, confidence had evaporated and problems spread to the rest of the financial system.
Share prices would fall even more in 1932 as the depression deepened. By 1932, The stock market fell 89% from its September 1929 peak. It was at a level not seen since the nineteenth century.
It is estimated that stockholders lost more than $40 billion dollars
Falling share prices caused a collapse in confidence and consumer wealth. Spending fell and the decline in confidence precipitated a desire for savers to withdraw money from their banks.
Mrs. Sandoval-ERHS

4. Bank Failures
In the first 10 months of 1930 alone, 744 US banks went bankrupt and savers lost their savings.
. As banks went bankrupt, it only increased the demand for other savers to withdraw money from banks.
Long lines of people wanting to withdraw their savings was a common sight (bank Runs).
The authorities appeared unable to stop bank runs and the collapse in confidence in the banking system. Many agree, that it was this failure of the banking system which was the most powerful cause of economic depression.
Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans.
This intensified the situation leading to less and less expenditures. Because of the banking crisis, Banks reduced lending, there was a fall in investment. People lost savings and so reduced consumer spending. The impact on economic confidence was disastrous.
Throughout the 1930s over 9,000 banks failed.
Bank deposits were uninsured and thus as banks failed people simply lost their savings.
Mrs. Sandoval-ERHS

5. Reduction in Purchasing
With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items.
This then led to a reduction in the number of items produced and thus a decrease in the workforce.
As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed.
More and more inventory began to accumulate. The unemployment rate rose to 25% which meant, of course, even less spending to help improve the economic situation.
Mrs. Sandoval-ERHS

6. Smoot Hawley Tariff
The decline of international trade as a result of U.S. SMOOT-HAWLEY TARIFF ACT of 1930 actually worsened the impact of Great Depression that had begun with the stock market crashes of October 1929.
As businesses began failing, the government created the Hawley-Smoot Tariff in 1930 to help protect American companies.
This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic revenge
Many blame it for bringing the already staggering U.S. economy to a complete halt, while holding it as an event that exported Great Depression to the rest of the world
Mrs. Sandoval-ERHS

7. Dust Bowl
When settlers came to the area, they built farms and planted crops.  Their crops replaced the natural grasses in the area, which had root systems more capable of sustaining life under the difficult conditions. In addition, the farmers grazed their animals over large areas and plowed entire fields at the end of each harvest.  These factors also hurt the soil and were causes of the Dust Bowl.
In 1890 and 1910, major droughts occurred.  New and more severe droughts followed in the period   The condition of the area became even more fragile.
In 1934, windstorms covered the Great Plains.  They easily uplifted the soil, blowing massive clouds of dust all over the plains.
Thousands of people were forced to leave their homes because of the Dust Bowl.  89 million acres of land were severely damaged or destroyed.  The Dust Bowl only served to make the Great Depression even more miserable.
Dust Bowl created many long-lasting problems and caused great suffering.
Mrs. Sandoval-ERHS

8. Buying on Credit Buying on credit was a huge problem in the 1920s.
Since the 20s was a period of great economic boom, not many people took the future into consideration.
Many people bought refrigerators, cars, etc. with money that they did not have. This system was called installment buying.
With this system, people could make a monthly, weekly, or yearly payment on an item that they wanted or needed.
This happened until Black Tuesday, when the stock market crashed. The two systems, installment buying and buying on credit, left millions of people in debt .
When many lost their jobs, they could not pay back the debts they had incurred.
Mrs. Sandoval-ERHS

9. Income Gap The gap between the rich and the poor widened
The wealthiest 1% saw their income increase by 75%; the rest of the population increased less than 9%
5% of Americans controlled 1/3 of all the wealth; 70% of Americans earned less than a subsistence wage
Mrs. Sandoval-ERHS