1. The Great
Depression

2. Causes of the Great Depression
Uneven distribution of wealth
Over-speculation on stocks
Crop surplus
Over-extension of consumer credit
Foreign Economic Crisis

3. Uneven Distribution of Wealth
5% of Americans earned 33% of the nation’s income
Working class Americans did not have that much money to spend
Americans like J.P. Morgan remained wealthy while others lost everything they had worked to save.
Inflation Calculator
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4. To test your skills on the stock market, click here.
Buying on the margin – 10% of the stock was paid for and the remainder was bought on credit
Black Tuesday (1929) – people started selling their stocks and many people lost as much as ten times their original investments
People hurried to the banks to try to save as much money as possible causing an even bigger economic panic
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To test your skills on the stock market, click here.
Stock Simulation

5. Plight of Farmers
Farmers produced surpluses of crops during WWI to feed the troops in Europe
They borrowed money to buy more equipment and increase production
Demand dropped and banks called in loans
Drought hit the Midwest
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6. Consumerism
Americans started buying refrigerators, cars, vacuum cleaners, radios, and stocks on credit
Advertising and increasing production of consumer goods enticed Americans to buy now and pay later
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7. World Economy Allies owed the U.S. $10 billion after WWI
U.S. was insistent on being paid
Dawes Plan of 1924: U.S. banks loaned money to Germany so that they could pay reparations
Hawley-Smoot Tariff of 1930 increased tariff rate to 38.5% nearly halting international trade
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8. LINKS http://www.amatecon.com/greatdepression.html
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