Download THE GREAT DEPRESSION

1929-1939
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
• Factories and farms
produce more goods
than people can buy
(Overproduction)
• After WW1 many
countries no longer can
afford American goods
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
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
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.
Why would a company sell stock??
TOO MAKE MONEY!!!
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)
Summer of 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.
• 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