1. What caused the Great Depression? Greed? Overconfidence? Bad luck? A world inter-connected as never before in history? Carelessness?

2. Automobile Sales soared during the ROARING 1920s Transparency: Automobile Sales in the 1920s Compare auto sales from 1920 to1929. Which industries would have benefitted from the growth in automobile sales?

3. Buying Stocks on Margin Transparency: Buying Stocks on Margin Why is buying on margin a risky investment strategy? Why did investors continue to borrow during the 1920s? Did farmers do something similar to buying stocks on margin?

4. Progress Monitoring Transparency Section 4 What was the impact of installment sales ? Personal debt increased by ___% from 1920 to 1929. What was the impact of installment sales ? Personal debt increased by ___% from 1920 to 1929.

5. Math is life Starting debt in 1920 was about $50 billion. Ending debt in 1929 was about $70 billion. 70-50=20 20/50=.40=40% During the ten year period, personal debt increased by 40%.

6. SHORT-term

7. LONG-term 1900 2009

9. In a healthy economy, business spirals “up.” “Yeay! Isn’t this fun? I know it will last forever!”

10. Spirals go both ways.

11. What caused the Great Depression?

12. What caused the Great Depression? Citizens borrowed too much money. -They bought consumer goods on installment plans (debt). -They bought homes and cars on credit (debt). Businesses borrowed too much (debt). People bought stocks on margin (debt).

13. What caused the Great Depression? Farmers borrowed to buy machinery (debt). -The farmers could not sell what they had grown because the demand for food fell after the war ended (no more troops to feed). -Europe was not buying food. European farmers could now farm since WWI was over. -The Smoot-Hawley Tariff passed by the Congress of the United States. This slowed trade with Europe. “The tariff game goes both ways.”

14. What caused the Great Depression? The federal government had not protected banks from “bank runs.” -When people became nervous, they pulled all of their money out of the banks. This destroyed many banks. (No money to lend.)

15. What caused the Great Depression? Was the stock market crash of October 1929 “cause” or “effect”?

16. What did Hoover do? Hoover believed that Americans could turn the economy around without government intervention. He tried to work with business leaders and increased public works projects in an effort to spur economic recovery. Hoover set up the National Credit Corporation (NCC) and Reconstruction Finance Corporation (RFC) to provide loans to individuals and businesses. It was not enough. Hoover believed that private charities and state and local governments—not the federal government—should provide relief assistance.

17. The Department of the Treasury --print money --disburse payments to the American public (e.g. build roads), --collect taxes, --borrow funds necessary to run the federal government (for example, sell bonds to China), The Federal Reserve System the central bank of the United States. manages interest rates regulate banks With whom do presidents work to solve economic problems?

18. What did the “Bonus Army” want?

19. What happened to the soil?

20. Who feeds you when you have no money?

21. Franklin Roosevelt's First Inaugural Address This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days. —Franklin Delano Roosevelt, First Inaugural Address, March 1933 What do you think Roosevelt's purpose was with this speech?

22. Do Now What are the qualities of a good leader?

23. Bearing Passion Knowledge Honesty…trust Persuade Empathize Communicate Provide structure Desire to serve Confidence Delegate Trustworthy Responsible Strict Respected Patient Powerful…not too much

24. Who was Roosevelt? Wealthy background. Harvard College and Columbia Law School New York Senate in 1910 as a progressive. Polio in 1921 at the age of 39. Elected governor of New York 1928 Reelected governor in 1930 Elected president of the United States in 1932

25. What actions did Roosevelt take to solve the complex problems? Emergency Banking Relief Act. Identified healthy banks. Federal Deposit Insurance Corporation. Insured bank deposits. “Your money is safe.” Roosevelt gave “fireside chats.” “Trust the banks.” Securities and Exchange Commission. “No more fraud.” Glass-Steagall Banking Act separated commercial banking from investment banking. This stopped banks from speculating (taking risks) in stocks.

26. National Recovery Administration (NRA) suspended antitrust laws and allowed business, labor, and government to cooperate. Agricultural Adjustment Act (AAA). The government paid farmers to stop producing certain crops. Congress wanted to lower the supply in order to raise prices. [Example] Civilian Conservation Corps (CCC) offered work to the unemployed. They planted trees, fought forest fires, and built reservoirs. Part of the mission was to stop a possible repeat of the “Dust Bowl.” What actions did Roosevelt take to solve the complex problems?

27. Federal Emergency Relief Administration (FERA). Money to state and local agencies to fund their relief projects. Public Works Administration (PWA). Build highways, dams, schools, and other government facilities. One-third of the nation’s unemployed were in the construction industry. The PWA awarded contracts to construction companies. The Work Projects Administration (WPA) gave work to unemployed, unskilled people to carry out public works projects. (Came after the PWA.) What actions did Roosevelt take to solve the complex problems?

29. What did this cartoonist think of the New Deal?