The Great Depression. Defining Depression What is an economic depression?

The Great Depression

Defining Depression

What is an economic depression?

The 1920s

The 20s were known as the “Roaring 20s”

Was a time of peace and prosperity in America.

Americans lived and spent like there was no tomorrow.

1920s In Europe

Growing consumer culture Entertainment

Movies Radio Sports

Standard of living increasing “New Woman”

Woman voting in Finland (1906)

The “New Woman”

Economic Weaknesses in Germany

Germany & reparations Hyper inflation

Dawes Plan

Black Tuesday: Stock Market Crashes

On October 29, 1929 the Stock Market Crashes.

The crash leads to a worldwide depression

Causes of Great Depression: 1

Over speculation in the stock market What is a stock? People were buying stock on credit (on

margin) in hopes that they would make money to repay.

Massive gambling on the stock market made stock practically worthless!!!

Causes of the Great Depression: 2

Overborrowing People were buying too much stuff on credit Got to the point that people were in too much

debt Businesses were not getting paid, and not

making money.

Causes of the Great Depression: 3

Overproduction in Factories and Farms Factories and farms were making too much Factories and farmers were losing money and

forced to shut down. Unemployment skyrockets

Causes of the Great Depression: 4

Uneven distribution of wealth The rich were getting richer, while the poor

were getting poorer. Rich were not spending their money, so the

flow of money trickled to a halt. Caused money value to inflate

Causes of the Great Depression: 5

Failure of Leadership of Governments When crises hit nations, government did not

act Governments slashed budgets instead of

spending money John Maynard Keynes

Causes of the Great Depression: 6

High Protective Tariffs What is a tariff? High tariffs kept American businesses from

having to compete with imported goods. Hawley-Smoot Tariff of 1930

Countries retaliated by raising tariffs on the U.S.

Impacts of the Great Depression

Unemployment increased

Homelessness increased

Workers became more militant

Farmers lost their farms Workers migrated in

search for work.