1. The Great Depression

2. Causes of the Great Depression
OBJECTIVE: you will be able to identify the main causes of the Great Depression.
1. Overproduction
2. The Stock Market Crash of 1929
3. Banks Fail

3. 1. Overproduction
Factories and farms produce more goods than people can buy (Overproduction)
After WW1 many countries no longer can afford American goods

4. 1. Overproduction RESULTS:
a. Prices of goods drop (goods were cheaper)
b. Workers began to get laid-off (fired)
b. Companies Shut Down
c. Farmers have to sell their farms

5. The following industries suffered as a
rubber
steel
oil
The following industries suffered as a
result of the failing car industry:
glass
construction
(roads and bridges)
housing
(as the suburbs grew)
paint

6. 2.The Stock Market Crash
Of 1929

7. What do I need to know about the Stock Market?
The stock market is a place where stocks and bonds are "traded" – meaning bought and sold.
Stock - units of ownership in a company.
Brainpop video
Why would a company sell stock??
TOO MAKE MONEY!!!

8. Stock Market in the 1920s
In the 1920s, Americans bought stocks in hope of getting rich
The economy is improving, and people assume it will continue to do well
Some Americans bought Stock on Margin: They borrowed money from their bank and used that money to buy stock (overspeculation)

10. Summer of 1929 Stock Market Crashes: “Black Tuesday”: Oct. 29, 1929
The value of stocks started to fall, so people got nervous and began to sell their stocks
Stock Market Crashes: “Black Tuesday”:
Oct. 29, 1929
Value of stock plummets
People lose all of their savings
People who over speculated could not pay back the bank.

12. 3. Banks Fail
Banks had loaned money to people who invested in the stock market.
When the market crashed, people could not pay their loans and the banks could not give depositors their money.
As a result, many banks closed down and many families lost their life savings.
40% of banks closed in the 1930s