Causes of the Great Depression

1. Causes of the Great Depression First, let’s see what you know.

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4. Choose which subtopic you would like to read about: Stock market crash Bank crisis Challenge: Independent causes How Hoover tried to help

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6. Which game would you like to play? Stock market crash Challenge: Independent Causes Bank crisis How Hoover tried to help

7. Stock Market Crash It is widely believed that the stock market crash caused the Great Depression. At the time, the stock market was referred to as a “bull stock”. The stocks kept rising, and there was rigorous buying and selling. Some people even manipulated the stock market to make more money. This approach made a few people rich, but the bull market was not good for long-term investing. Stocks quickly went down, and margin buyers panicked on Black Tuesday. Unfortunately, more than the entire amount of U.S. currency was out on loan, so the U.S lost $8.5 billion when the stock market crashed. (Causes of the Great Depression). Despite all this, some historians believe the crash and the depression are only partially related. (The U.S. Stock Market Crashes On Black Tuesday, Oct 29, 1929) Go to game

8. Bank Crisis Banks’ heavy stock investments caused them to lose a lot of money when the stock market crashed. Banks also lost money when margin buyers were unable to pay back their loans. The banks closed, and people lost their money that they invested (Deverell and White). Every time a bank tried to close, people rushed to withdraw their savings. The banks didn’t have enough money to pay back all the loans, and were forced to close. These became known as bank runs (Banking in the 1930s). Over 1400 banks were closed. The U.S. lost $725 million from banks alone (Banking in the 1930s). By this time, the economy was in serious trouble. Banks had $7.37 billion, and the U.S. was $40.5 billion in debt. Just one week before Roosevelt’s inauguration, one quarter of a billion dollars was lost in gold from a federal bank. A bank holiday was created so that the banks could have a chance to be inspected without bank runs and other bank activity. At first, people panicked, but upon inspection of the banks, some issues were solved (Banking in the 1930s). Go to game

9. How Hoover tried to help Many people blame President Herbert Hoover for this mess. He didn’t create all of it, but he certainly played a part. Some officials thought it was best to leave the problem alone; “‘The leave-it-alone liquidationists headed by the secretary of the treasury Mellon…felt that the government must keep its hands off and let the slump liquidate itself’” (Causes of the Great Depression). Hoover did try to help the depression, but most attempts were useless or worse. Hoover increased Federal spending and taxes, and even raised tariff rates. This proved disastrous, and caused a trade war. The U.S. sank deeper into the Great Depression (Herbert Hoover). Hoover then tried helping individuals through philanthropic organizations and churches, but did not directly assist the homeless and unemployed. Furthermore, after World War One, the United States demanded money from Europe. As a result, most of Europe was in an economic crisis. Adding insult to injury, Hoover called on Europe for monetary assistance. When Hoover left office, unemployment rates had only improved 1% (Herbert Hoover). Go to game

10. Independent Causes While all of these events may have contributed to the Great Depression, there are other theories out there, two of which are Keynesian and Monetarist. Keynesians believe that too much investing caused lower interest rates. Lower interest rates meant more investing and more money lost in the crash. On the other hand, Monetarists believe that the crash was an ordinary recession, but faulted monetary policies turned it into the depression (Causes of the Great Depression). Along with these theories, other things are believed to have caused /worsened the depression. After World War One, Europe owed money to the U.S. The U.S. expected all debts to be paid back fully, even though it knew Europe couldn’t (Thomas and Mary). As a result, both parties fell into depression. Companies’ spending may also have contributed; using more of their profits for expenses than wages. Even the agricultural industry might have been a problem; it hadn’t fully recovered from the recession of ’22 and’23 (Thomas and Mary). Whatever caused it, the Depression was a major problem; total debt to GDP levels was 300%. (Causes of the Great Depression) Go to game

11. Stock market Crash Game Answer the question correctly before you lose all your money. Continue

12. Stock Market Crash Game What was a bull stock? A. when stocks were all worth over $300 B. When stocks kept falling C. When there was rigorous buying and selling D. When people manipulated the stock market to make more money.

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14. Stock Market Crash Game What was the date of Black Tuesday? • September 30, 1928 • August 31, 1928 • September 20, 1928 • October 29, 1929

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16. Stock Market Crash Game The bull market was perfect for long-term investment. TRUE FALSE

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18. Stock Market Crash Game How much money did the U.S. lose in the crash? • £8.5 million • $8.5 million • $0.0085 trillion • $26 million

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20. Bank crisis True/false: • Banks lost $725 million . • Bank runs were when people threatened bank owners in the depression for money. • Bank holidays fixed the bank crisis immediately. • Bank runs greatly helped the banking business. • Banks lost money when margin buyers were unable to pay back loans.

21. How Hoover tried to help Do you have what it takes to be president? Based on Hoover’s actions, choose the correct action for each situation: You need to fix the depression. What do you do? 1. increase federal spending and taxes 2. find ways to create trade and jobs 3. leave it alone Europe owes money. What do you do? 1. demand all money 2. grant Europe amnesty from debts 3. have money paid back slowly

22. Independent Causes Matching: 1.Keynesians a. faulty spending habits 2. Monetarists b. demanded full payment from Europe 3. U.S. 4. Agriculture Industry c. had recession in ‘22 and ‘23 5.Companies d. believed that monetary policies were responsible for the Depression e. believed that too much investing and not enough spending were responsible for the Depression

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