Bell Ringer

1. Bell Ringer • What time period does this cartoon depict? • Describe what is meant by the caption at the bottom?

2. Question #1 • What do you think caused the Great Depression? • How does that relate to the era of the 1920’s?

3. SSUSH17 Analyze the causes and consequences of the Great Depression.

4. Causes: LONG-TERM: SHORT-TERM: Stock Market Crash (Oct. 1929) Also known as “Black Tuesday” • Bank loans • Overproduction • Under-consumption • Unemployment • Stock market speculation • “buying on the margin” • Disparity in wealth

5. CAUSES—OVERPRODUCTION: • Industries increased their capacity to produce goods, a surplus was created • However, because Europe was in a recession due to WWI, European countries were not buying as many American made products • There were more goods that consumers (buyers)

6. Underconsumption • Though more efficient machinery in factories and on farms led to overproduction, few consumers had the money to purchase these goods • The average consumer had very little buying power • Underconsumption led to lower prices which resulted in the loss of money for farmers and manufacturers What happens to factory workers if the product they produce isn’t being purchased?

7. Stock Market Speculation • In the late 1920s many Americans began to invest heavily in the stock market • Americans invested in high-risk stocks that would allow them to make a lot of money quickly, or lose a lot of money quickly

8. Stock-Market Speculation: • Speculators were those who tried to make quick money on the stock market: -Many speculators bought stock on margin -Buying on margin means that speculators borrowed money to buy stocks: this works if the stock price goes up, but is disastrous if the stock price falls -Many speculators of the 1920s borrowed 90% of the stock’s value (If a stock cost $100, you would borrow $90. If the stock price began to fall, you would then have to pay back the money you borrowed-which many speculators didn’t have!)

9. Disparity in wealth: • Some Americans prospered during the 1920s, others did not • Farmers lost income • Workers wages fell & an unequal distribution of wealth developed • The richest 1% of the American population owned 40% of the country’s wealth

10. Banking Panic: • As unemployment increased, Americans began to withdraw more and more of their savings out of banks • Banks lacked the money, so they called in loans and banks began to fail • In all, over 9,000 banks failed during the 1930s • Most people lost their life savings

11. Causes of the Great Depression Discuss: How do these diagrams help you to understand the causes of the Depression?

12. Stock Market Crash: • Oct. 1929 • “Black Tuesday” • Sparked a chain of events that quickened the collapse of the US economy • Americans, fearful of the dip in stocks, tried to withdraw their money from the banks, causing the banks to fail

13. Great Depression: • Worldwide economic depression that took place from 1929-1941 (beginning of World War II) • 1933: lowest point of the Depression; over 15 million Americans were unemployed & over half of the nation’s banks had failed

14. b. Explain factors (including over-farming & climate) that led to the Dust Bowl & the resulting movement & migration west.

15. Dust Bowl • Symbol of overproduction due to farmers planting too many crops • In 1932 a drought hit the Great Plains, turning much of the top soil into dust-with the lack of rain and crops, wind blew the dried soil for hundreds of miles

16. Farming & climate: • New farming techniques made drought conditions worse • Grass originally held topsoil in place but due to over-farming, grass began to disappear & could not longer do the job • Eventually ended when rains returned to the Great Plains in 1938

17. Migration: • Families trapped in the Dust Bowl were forced to move out of the Great Plains • Dust Bowl refugees were known as “Okies” although many did not come from Oklahoma • Most packed up old trucks & headed towards California, Oregon, or Washington to find jobs

18. Question #2 • Who was President at the beginning of the Great Depression? • Who will be elected President during & after the Great Depression?

19. c. Explain the social and political impact of widespread unemployment that resulted in developments such as Hoovervilles.

20. Consequences: • 25% of Americans were unemployed • 2 million homeless people • Women, who were often times single parents were fired because businesses felt jobs should go to men first • Blacks were often the first laid off • Children were malnourished

21. Herbert Hoover: • 31st President • In office from 1929-1933 • Previous Presidents contributed to the stock market crash, yet Hoover was blamed by Americans • Did not recognize the severity of the situation & did little to help Americans • Believed in little governmental involvement to help

22. ` • As more workers lost their jobs, they were unable to pay their rent or mortgage and were evicted • This new class of homeless began to build shacks on the outskirts of cities called shantytowns, or Hoovervilles. Why did people call shantytowns “Hoovervilles”?

23. Exit Card • What economic factors caused the Great Depression? • In what ways was the Great Depression similar to the Great Recession that we are currently coming out of? • What is the difference between a Recession and a Depression?