Transcript of Analyze the causes and consequences of the Great Depression.
- Slide 1
- Analyze the causes and consequences of the Great
Depression
- Slide 2
- Under the presidency of Calvin Coolidge, the US practiced
laissez-faire economics which allowed the people to do what they
wanted because there was no government involvement in the market
Americans began to make high risk gambles on the stock market
called speculation ---guessing which stocks would spike for them to
make a great deal of money 17a: Describe the causes, including
overproduction underconsumption, and stock market speculation that
led to the stock market crash of 1929 and the Great Depression
- Slide 3
- Americans also used a practice called buying on the margin,
investors would buy stocks for only a small part of what they cost
and borrow the rest of the money on a loan The idea behind this is
they would make enough money to pay off the interest on the loan
and then profit the rest---when the stock market crashed, many
people went into debt because this plan failed 17a Continued
- Slide 4
- Consumerism also took over as many people began to spend more
money than they saved With new technology, businesses could now
make goods faster than ever. So fast that people could not buy them
fast enough. This leads to Overproduction which would make the
price of goods do what? When consumers stopped buying goods, this
became known as Underconsumption 17a Continued
- Slide 5
- When overproduction and underconsumption is combined, this
leads to companies taking big losses and having to lay people off
of work and leads to a rise in the unemployment rate 17a Cont
- Slide 6
- One group who was not experiencing the success that others were
having in the 1920s were farmers. After the war, prices on farm
goods dropped significantly. Congress tried to help farmers out,
but President Coolidge vetoed the bills because he did not want the
government to interfere. 17b Explain factors (include over-farming
and climate) that led to the Dust Bowl and the resulting movement
and migration west.
- Slide 7
- Because of bad farming habits that tremendously damaged the
soil in the midwest, as well as severe drought, much of the ground
in the midwest was extremely dry High winds created a disaster
called the Dust Bowl over much of this area that would blanket
farms with clouds of dirt and dust 17b cont
- Slide 8
- Republican Herbert Hoover replaced Coolidge as President in
1929. Hoover also believed the government should stay out of
economics, and this was not good for the American people. Hoover
took office at a time when the market was in bad shape and on
October 29, 1929 the stock market crashed. This day became known as
Black Tuesday 17c Explain the social and political impact of
widespread unemployment that resulted in developments such as
Hoovervilles.
- Slide 9
- When this happened, people who had gambled on the stock market
lost everything. The farmers were already broke because of the dust
bowl. The Great Depression had begun Banks closed as people would
literally run to the bank to get their money out. So much money was
withdrawn from banks, that the banks had to close because they went
bankrupt themselves 17c cont
- Slide 10
- Stocks fell even further as people did not have the money to
invest in the stock market The unemployment rate was at 25% (one
out of four people did not have jobs). Many people became homeless.
Others had to depend on breadlines and soup kitchens for food
Homemade villages were made with people living in cardboard boxes
called Hoovervilles 17c cont
- Slide 11
- 17c Hoovervilles