HANDOUTS The Causes of the Great...
Transcript of HANDOUTS The Causes of the Great...
HANDOUTS The Causes of the Great Depression
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Secondary U.S History
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Lesson Plan: The Causes of the Great Depression
Objective Students will be able to analyze the causes of the Great Depression by completing a storyboard.
Preparation Copy 1-per-student, back-to-back: The Economic Collapse Fill-In Lecture (pages 1 & 2) Copy 1-per-student: The Great Depression Story
Anticipatory Set Pair-Share
Instruction 1. Pass out the WORKSHEETS to students. 2. Review the PowerPoint Presentation. The presentation
will prompt the actions for the students. Students will complete Cornell Notes. For homework, students will complete the questions.
3. When you see , click the icon to play YouTube film clip. If you don’t have access to YouTube at your school site, you can download YouTube video’s for free. Simply Google, “download YouTube video’s”.
Wrap-up 1. Students will complete The Great Depression Story
Supplies 1. WORKSHEET: The Great Depression Story 2. WORKSHEET: The Economic Collapse Fill-In Lecture 3. Power Point Presentation: The Causes of the Great Depression 4. Access to YouTube.com
Time Approx. 1 Hour
Lecture Notes: THE CAUSES OF THE GREAT DEPRESSION
The Postwar Economic Boom
Twenties’ Prosperity
During the 1920s, Americans believed that in the U.S. would be eliminated. Due
to increased earnings, many Americans had more money to spend on luxury goods such as
radios and . By 1929, the U.S. stock market was at an all-time high, over
billion shares of stock was traded.
The Depression Foreshadowed
By late 1929, began to surface. was on the rise, were
losing their land, and prices were dropping. The number of Americans living in
increased , and people could afford luxury goods. On October 29, 1929 the stock market crashed.
Causes of the Great Depression
1. laissez faire in domestic affairs. 2. stock speculation 3.
banking institutions 4. of goods 5. of the farming industry
6. distribution of wealth.
Cause #1: Republican Economic Policies
Domestic Economic Policies
Republican Presidents Calvin Coolidge and Herbert Hoover believed in “ ” economics. They believed that economic policies that benefited business and the
wealthy would eventually “trickle down” to Americans. For example, if the gov-
ernment gave tax cuts to the wealthy they would that money into the economy
for the benefit of all. However wealth did not trickle down. The wealthy spent the money on
expanding their work facilities and it for themselves.
International Economic Policies
After WWI, European countries were in debt to the U.S and began to on their
loans. The U.S. placed high on foreign goods to discourage Americans from
buying their merchandise. This meant that European goods would not be sold here causing
Europeans to more money and further on their loans.
Cause #2: Real Estate and Stock Speculation
Unchecked Stock Market Speculation
Speculation is when a person or organization makes a risky on the hopes of
Page 1
Review Activities
Create an illustration to depict the prosperity of the 1920’s.
Understanding the policies of
Conservative Republicans, What do
you think are economic policies of
Liberal Democrats?
If you were a stock analyst what signs
would make you predict that the stock
market was going to eventually crash?
getting . Investors believed that the stock market would go in-
definitely and that companies’ profits would continue to _. So, investors specu-
lated which companies’ stocks would rise and then bought large amounts of _. They
would then turn around and the stock for a higher price, making a easy
profit. The value of a company’s stock became artificially and did not corre-
late to the companies’ actual worth.
Stock analysts began to predict the market was headed for a fall. They warned that stock prices
could not continue to rise at such an rate and that the were
exceeding the stock’s actual worth.
Cause #3: The Stock Market Crash and the Banking Industry Collapse
The 1929 Stock Market Crash
In late 1929 investors began selling their stocks while they could still get a from
them. As investors began selling, prices began to fall. On 10/29/29, or
What could have prevented the stock market
from crashing?
“ ” investors flooded the NYSE with at any price orders. By the end of the day, investors lost $ billion. By October’s end, the stock market was in
and the Great Depression had officially .
Unregulated Banking Institutions
Banks collapsed because of the Republican policy of and banks’ over-
extension of to stock investors. The government did not prevent banks from specu-
lating depositor’s on high risk ventures. It did not also demand that banks keep a
certain percentage of money on and available. Therefore, when banks folded after
the stock market crash, their customers had no way of getting their _____. http://www.teacherspayteachers.com/Store/Chalk-Dust-Diva
What regulations could have been in place
to prevent the banks from closing?
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Lecture Notes: THE CAUSES OF THE GREAT DEPRESSION Page 2
Banks permitted investors to buy stocks on large margins of . For example, if an
investor wanted to buy $20,000 worth of stock, he only had to put up % ($2,000) of his
money. The bank would then loan the remaining 90% or $18,000. The bank would seize the
stock if they could not repay the loan as if it were . Banking officials thought that
stocks were as good as money and would not go _.
The Banking Industry Collapse: Results
1. Families that played the stock market lost all their . 2. Investors who had
bought stocks on margin had to sell them at a fraction of their original price. This meant that
they could not the bank the amount it had loaned him. This meant that the bank
could not replace its money, which it had used to fund the speculator’s loans.
So, even people who did not invest in the stock market lost their money. 3. Unemployment
increased which meant that people began to on their mortgages. This meant that
banks lost even more money. By 1932, of the nation’s banks closed.
Review Activities
The bank is failing. How do you think the
depositors trying to get their money are
feeling?
How do you think bank failures affected the
nation?
Cause #4: Overproduction
Industrial Goods
demand for goods was high after WWI. Americans wanted to enjoy life after
the horrors of WWI. enticed Americans to purchase more and more goods. As
a result, business owners continued to the market with a huge supply of goods. By
1929, there were more products available than people to them.
Agricultural Goods
American farmers during WWI because they provided food to the U.S. and
Europe. After the war, farmers mechanized farming techniques to increase .
However, Europe did not need American food anymore resulting in a of
crops. Farmers were stuck with a of crops they could not sell, or could only sell
for a price.
Create Questions:
Level 1: What_______________________
____________________________________
____________________________________
_________________________________
Level 2: Why_________________________
____________________________________
____________________________________
____________________________________
Level 3: Predict_______________________
____________________________________
____________________________________
____________________________________
_______________________ Cause #5: The Toll on the Farming Industry
The Farming Industry Decline
During the 1920s, farmers borrowed heavily from banks to pay for new .
When farmers could not sell their crops, they could not their . Farmers defaulted on
their loans and lost their farms to bank . The banks would then
try to the farm, but their were few that could afford to buy it. This meant that the
bank lost even more money.
The Dust Bowl
A severe caused the soil to turn into . Farmers and their families
fled the Dust Bowl and headed west to in search of employment. People
referred to these migrating farmers as “ .” Unable to pay for adequate housing,
the Okies were forced to live in .
Create a picture of the Dust Bowl
Cause #6: Unequal Distribution of Wealth The Gap Between the Rich and Poor
During the 1920s, the gap grew and the of wealth grew unequal. In 1929, % of the population owned % of the nation’s wealth. _% of U.S families
lived on or below the poverty line. Workers struggled to survive in the 1920s. Companies re-
placed workers with that produced goods and . Corpo-
rations rarely passed profits onto workers with wages. Instead they kept wages
low and used the money to improve their facilities.
Purchasing Power is Lost
and businesses tried to encourage spending by allowing people to
buy things on credit. But Americans fell deeper and deeper into as they pur-
chased items they could not afford and paid the high interest on them. By 1929, Americans
could not afford necessities let alone goods. A small handful of
wealthy Americans could not fill in the gap for the entire _.
dropped and companies began to
How would a gap between the rich and
poor contribute to the economic collapse of
the 1920s?
Wrap-Up question: Which cause of the
great depression was the most significant
and why?
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