The Great DepressionThe Great Depression

Reasons it happened Reasons it happened and effects on peopleand effects on people

Cause #1Cause #1

Stock Market crashed—Black Tuesday Stock Market crashed—Black Tuesday October 29, 1929October 29, 1929 Investors (people who owned stocks) lost $40 Investors (people who owned stocks) lost $40

billion at oncebillion at once Country could not recover from such a lossCountry could not recover from such a loss

Cause # 2Cause # 2

Bank Failures—Over 9,000 banks failedBank Failures—Over 9,000 banks failed Banks were uninsured so people could not get Banks were uninsured so people could not get

their money backtheir money back Banks stopped loaning money because they Banks stopped loaning money because they

were unsure the economy would recoverwere unsure the economy would recover

Cause # 3Cause # 3

People just stopped buying products— People just stopped buying products— consumers couldn’t afford to purchase things consumers couldn’t afford to purchase things or were afraid to purchase big itemsor were afraid to purchase big items

Less items were bought—so people who made Less items were bought—so people who made those items lost their jobsthose items lost their jobs

Unemployment went up to 30% of the Unemployment went up to 30% of the populationpopulation

Cause #4Cause #4

Smoot-Hawley Tariff—taxed goods coming Smoot-Hawley Tariff—taxed goods coming from Europe to protect American productsfrom Europe to protect American products

Europe retaliated and Americans lost money Europe retaliated and Americans lost money by losing some trade with Europeby losing some trade with Europe

Cause #5Cause #5

Drought in the Mississippi Valley and Great Drought in the Mississippi Valley and Great PlainsPlains

Created the Dust Bowl—no grass or trees and Created the Dust Bowl—no grass or trees and huge dust storms killed crops huge dust storms killed crops

Farmers had to sell their land and leaveFarmers had to sell their land and leave

Cause #6Cause #6

Hoover Administration and Congress cut taxes Hoover Administration and Congress cut taxes on the wealthyon the wealthy

Tax rate went down from 73% to 24%Tax rate went down from 73% to 24% Government could not help people with Government could not help people with

revenue (money coming in to run the revenue (money coming in to run the government) lowered so muchgovernment) lowered so much

Herbert HooverHerbert Hoover

President during the depressionPresident during the depression Laissez-faire (which means hands off) was his Laissez-faire (which means hands off) was his

way of handling the needs of people who way of handling the needs of people who needed help during the Depressionneeded help during the Depression

Businesses should not be coerced to do the Businesses should not be coerced to do the right thingright thing

No direct help to people in need—would make No direct help to people in need—would make them dependentthem dependent

Hoover (cont)Hoover (cont)

Shacks built by homeless people came to be Shacks built by homeless people came to be known as Hoovervillesknown as Hoovervilles

Hoover’s policies were said to be too little too Hoover’s policies were said to be too little too latelate

LinkLink

This link takes you to more facts about the This link takes you to more facts about the Great Depression (and some New Deal facts)Great Depression (and some New Deal facts)

http://www.thegreatdepressioncauses.com/http://www.thegreatdepressioncauses.com/facts.htmlfacts.html

Results of Great DepressionResults of Great DepressionMillions out of a jobMillions out of a job

Millions with no homeMillions with no homeSoup Kitchens (stand in line for one bowl of Soup Kitchens (stand in line for one bowl of soup and bread—all day only thing you get)soup and bread—all day only thing you get)

No way to make moneyNo way to make moneyFarms closed because of the Dust Bowl—Farms closed because of the Dust Bowl—higher food prices—supply and demandhigher food prices—supply and demand

FDR’s New Deal to the RescueFDR’s New Deal to the Rescue

Laws and regulations called the “New Deal” Laws and regulations called the “New Deal” were enacted to help people recover from the were enacted to help people recover from the DepressionDepression

(more later)(more later)