Causes of the Great       Depression“We in America are nearer to the  final triumph over poverty than  ever before.” –Herb...
Learning Goal NJCCCS:   6.1.12.D.9.a Explore the global context of the Great  Depression and the reasons for the  worldw...
How did we get here?
Great Depression: (1929-1939) Shocking   after a decade of unprecedented  prosperity Impacted all areas of America life...
False Advertising   Prosperity of the 1920s were superficial   Causes of the Great Depression were complex and    largel...
Causes of the Depression   Uneven distribution of    income   Uneven distribution of    corporate wealth   Overproducti...
I. Uneven Distribution ofincome The  wealthiest 5% took in nearly 1/3 of the  nation’s income Nearly ½ of the nation’s f...
Depressed Consumer  Purchasing Power                  Mellon’s Tax Cuts       Business increased                        ...
2. Uneven distribution ofcorporate wealth In1929, 200 Corporations controlled ½ of the  corporate wealth. Some industrie...
3. Overproduction andunderconsumption   For an economy to    function properly:    t(d)=t(s)   In 1920s- there was an   ...
4. Easy Credit                    Installment plans                    Borrowing on margin to                     buy st...
5. Large scale internationalwealth distribution problems   America prospered in the 1920s, while Euro. Nation struggled  ...
Protective Tariffs   Fordney-McCumber                   Hawley-Smoot 1930    1922                                     r...
6. Speculation on the stockmarket   By 1929 about 4 mil. Americans/ 3% of the population owned stocks   Stockbrokers wil...
7. Shortsighted governmentpolicies   Mellon’s Tax cuts   Protective Tariffs   Fed Reserve    Board fearing    inflation...
The Role of Hoover in theGreat Depression*   Passing Hawley-Smoot (1930) despite objections    from 1000 Economists   Ma...
Depression’s effects Widespread  bank failures Bankrupt businesses High unemployment Decrease in worldwide trade Incr...
11.3 causes of the great depression 1930 1933
11.3 causes of the great depression 1930 1933
11.3 causes of the great depression 1930 1933
11.3 causes of the great depression 1930 1933
11.3 causes of the great depression 1930 1933
11.3 causes of the great depression 1930 1933
11.3 causes of the great depression 1930 1933
Upcoming SlideShare
Loading in...5
×

11.3 causes of the great depression 1930 1933

2,867

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
2,867
On Slideshare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "11.3 causes of the great depression 1930 1933"

  1. 1. Causes of the Great Depression“We in America are nearer to the final triumph over poverty than ever before.” –Herbert Hoover
  2. 2. Learning Goal NJCCCS: 6.1.12.D.9.a Explore the global context of the Great Depression and the reasons for the worldwide economic collapse.
  3. 3. How did we get here?
  4. 4. Great Depression: (1929-1939) Shocking after a decade of unprecedented prosperity Impacted all areas of America life Damaged confidence in the future Rock bottom: 1932 Median incomes plunged to ½ what they had been in 1929 ¼ out of work
  5. 5. False Advertising Prosperity of the 1920s were superficial Causes of the Great Depression were complex and largely ignored throughout the decade
  6. 6. Causes of the Depression Uneven distribution of income Uneven distribution of corporate wealth Overproduction and under- consumption Easy Credit Large Scale international wealth distribution problems Speculation on the stock market Shortsighted government policies
  7. 7. I. Uneven Distribution ofincome The wealthiest 5% took in nearly 1/3 of the nation’s income Nearly ½ of the nation’s families earned less than $1,500 a year Henry Ford made roughly $14 million/year in the 1920s
  8. 8. Depressed Consumer Purchasing Power  Mellon’s Tax Cuts  Business increased profits while holding down wages.  50% increase in production during the 1920s  No increase in wages1.Cut the top income tax rate from 77 to 24 percent  Workers couldn’t afford2. Cut taxes on low incomes from 4 to goods/ relied on credit or 1/2 percent stopped spending3. Reduce the Federal Estate tax4. Efficiency in government  Less money circulating
  9. 9. 2. Uneven distribution ofcorporate wealth In1929, 200 Corporations controlled ½ of the corporate wealth. Some industries thriving (automobile), while others like agriculture declining steadily (Average income for a farmer: $273) The businesses that were thriving were somehow connected to either radio or automobile industries.
  10. 10. 3. Overproduction andunderconsumption For an economy to function properly: t(d)=t(s) In 1920s- there was an oversupply of goods. (Mech. of industry/farming partly responsible)
  11. 11. 4. Easy Credit  Installment plans  Borrowing on margin to buy stocks  Private banks loaned out millions → rising debt throughout the 1920s
  12. 12. 5. Large scale internationalwealth distribution problems America prospered in the 1920s, while Euro. Nation struggled to rebuild after the war. U.S. lent $7bil. To Euro. during war. Another $3bil by 1920. Dawes Plan of 1924 lent money to Germany [made them dependent of foreign markets]
  13. 13. Protective Tariffs Fordney-McCumber  Hawley-Smoot 1930 1922  raised U.S. tariffs on  raised American tariffs over 20,000 imported in order to protect goods to record levels factories and farms.  Led to a decrease in  Countries injured by imports/exports by more WWI- w/ Tariffs they than ½ would not be able to  Led to a rise in make payments to unemployment America on war loans  Farmers blame Tariff for Depression
  14. 14. 6. Speculation on the stockmarket By 1929 about 4 mil. Americans/ 3% of the population owned stocks Stockbrokers willing to lend up to 75% of stocks purchasing price Americans wanted to take advantage of the “bull market” (rising stock prices) Stock prices peaked in early Sept. 1929 10/24/1929 (Thursday) huge plunge 10/29/1929- “Black Tuesday” 16 mil. shares dumped
  15. 15. 7. Shortsighted governmentpolicies Mellon’s Tax cuts Protective Tariffs Fed Reserve Board fearing inflation, tightened credit [opposite action was needed to fight the slow down in purchasing)
  16. 16. The Role of Hoover in theGreat Depression* Passing Hawley-Smoot (1930) despite objections from 1000 Economists Maintaining Federal Relief was not necessary despite farm prices dropping to record lows and 4,340,000 Americans out of work, 32,000 businesses bankrupt and 5,000 banks failing Attempts made: creating road, public building and airport construction programs; increasing credit facilities, Reconstruction Finance Corporation (RFC)- with $2 bil. To banks, r.r., factories and farmers*source: http://www.u-s-history.com/pages/h1569.html
  17. 17. Depression’s effects Widespread bank failures Bankrupt businesses High unemployment Decrease in worldwide trade Increasing numbers of homeless persons Widespread hunger and illness

×