1. Post War Economic Boom
► Americans were earning more money than
ever in the 1920s.
► Americans made $61 billion in 1922, they
made $87 billion by 1929.
► Bought more luxury goods (cars, radios,
► U.S. stock market was at an all time HIGH!
► 1.1 billion shares traded by the end of 1929.
2. Causes of the Great Depression
► Republicans (President Coolidge and
Hoover) believed in helping big business
Provided help in offering business tax cuts.
► The goal was profits gained due to lower
taxes would “trickle down” and benefit the
► Result – Businesses become wealthier,
workers wages remain low.
3. Causes of the Great Depression
► Republicans refused to forgive $11 billion in
war debt to European allies. Instead lent
them more money and England and France
fell deeper and deeper into debt.
► Republicans imposed a high tariff on
imported goods. Furthered Europe’s
4. Causes of the Great Depression
► Consumer demand for goods is high
► 1920s witnessed rapid economic growth
New machines in factories decrease production
Expansion as manufacturers made/sold new
products like cars, radios, and refrigerators
► 1929 - Many consumers lacked the money
to buy these goods
Manufacturers soon produced more goods than
they could sell
5. Causes of the Great Depression
Stock Market Speculation
► Americans tried to use the stock market to
“get rich quick” by buying stocks
Drove prices even higher
► Investors bought a company’s stock and sold
it for a higher price. Stock becomes
► By 1929, stock prices TRIPLED since 1920
► Stock prices were being sold higher than the
6. Causes of the Great Depression
► Banks collected money from depositors and
invested in businesses
They earned $$$ to pay interests on deposits
► Most banks honest, but some made unsound
► Government failed to regulate banking/stock
► Consumers bought more than they could afford
► Large use of credit purchases made U.S.
economy system extremely vulnerable
7. Causes of the Great Depression
Restricted International Trade
► Tariffs protected U.S. markets
► This made it hard for producers to sell goods
Countries retaliated by setting their own high
► President Hoover signed highest tariff in
► Shrinking of world trade contributed to the
8. Causes of the Great Depression
► Analysts warn that constantly rising stock
prices could not last for long.
► On “Black Thursday” Oct. 24, 1929, stocks
began to move sharply downward
Investors become nervous and begin to
No on stepped in to buy any stock to
support the fall
9. Stock Market Crash
► Stock Market crashes on
Oct. 29, 1929
“Black Tuesday”, and launched the most
devastating depression in U.S. history.
Investors lost $16 billion.
► The “crash” did NOT cause the depression,
it was one of many factors.
Personal Response -- A president of a company
in NY threw himself off of a ledge when his
company’s stock fell from $113 to $4 a share
10. Causes of the Great Depression
Risky Lending Practices
► Republicans laissez-faire (“leave alone”)
beliefs allowed the banking industry to
engage in risky practices.
► Banks permitted investors to buy stocks on
► When the market crashed, investors could
not pay the bank back for the loans.
► By 1932 – 6,000 banks closed.
11. Causes of the Great Depression
► After “the crash”
Corporations couldn’t raise funds
People lost life savings, jobs, unable to pay
rent/ mortgage on homes.
►Factories closed due to falling prices and falling
No one to buy foreclosed houses
Without a “safety net” – like unemployment
insurance – hundreds of thousands of
Americans found themselves living on the
streets or in makeshift shacks
12. Photo A
13. Causes of the Great Depression
► Decline in farming industry
► Europe does not need U.S. agricultural
products by 1920s.
► Farmers are in debt to bank because they
have expanded their farms, equipment, etc.
► Dust Bowl – drought so severe that soil
becomes powdery dust.
► “Okies” – farmers who moved out of midand southwest U.S. to escape the drought.
14. Causes of the Great Depression
► Unequal distribution of wealth
► The rich were getting richer and the poor
were getting poorer.
► 60% of U.S. families lived on or below
$2,000 a year.
► 1% of Americans possessed 59% of
► People could not afford to purchase goods,
sales dropped and companies failed.
15. Diary of 1930s-Assignment
► Imagine you are living in the 1930s.
Based on how people’s lives were affected,
write a ¾-1 page diary of what you life would
have been like. Look back in your notes if
needed. Use historical information &
challenges that people struggled and dealt
Put in class folder when finished.