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Causes of The Great Depression

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1. Yee Haw!! 2. President Herbert Hoover From a speech given October 22, 1928: ….When the war closed, the most vital of issues both in our own country and around the…
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  • 1. Yee Haw!!
  • 2. President Herbert Hoover From a speech given October 22, 1928: ….When the war closed, the most vital of issues both in our own country and around the world was whether government should continue their wartime ownership and operation of many [instruments] of production and distribution. We were challenged with a... choice between the American system of rugged individualism and a European philosophy of diametrically opposed doctrines -doctrines of paternalism and state socialism. …. our American experiment in human welfare has yielded a degree of well- being unparalleled in the world. It has come nearer to the abolition of poverty, to the abolition of fear of want, than humanity has ever reached before. Progress of the past seven years is proof of it....
  • 3. Causes of the Great Depression
  • 4. Speculation and Crash • Bull Market • Buying on the Margin • Speculation • Black Thursday • Black Tuesday • Bear Market Speculative bubbles from the present?
  • 5. • Bank Runs
  • 6. Yee Haw Stock Market Crash 1929 Students selected the “Go for the Gold” option Some students bought bonanza chips Point values decreased dramatically, all but those who held tight lost everything they had and sometimes more Even those who played it safe lost their credit
  • 7. Overproduction, Underconsumption, and Concentrated Wealth • Mass production • Overproduction • Underconsumption • Wealth Gap • Downward spiral Speculative bubbles from the present?
  • 8. Businesses went bankrupt Unemployment Cannot afford to buy goods Profits shrank
  • 9. Government Assistance? • Tariffs worsen things • Hawley – Smoot Tariff Act 1929
  • 10. The Stock Market Crash of 1929 The Banks The Borrowers The Businesses The bank gives a $100 loans for $20 up front. The bank has $20. The bank gives a $150 loan for $30 up front. The bank has $50 The recipient takes a $100 loan from the bank. The recipient has $100. The recipient buys two shares of stock for $50 each. The recipient has $0. Buying with loaned money is referred to as buying on the margin. Speculation causes stock prices to rise to $75. The recipient takes another $150 loan. And buys two more shares of stock. The recipient has $0. European investors get nervous and start selling their stock investments. As prices fall, they gain momentum. The recipient attempts to sell all four of his stocks for $25 each, for a total of $100. The business sells two shares of stock for $100 and invests it in land. The businessman has $0 The land that the business bought was overpriced because of speculation and becomes worthless. The business no longer has enough money to operate.
  • 11. http://www.youtube.com/watch?v=Wil1ePlT1xs&feature=relmfu&safe=active 1. How did the Great Depression effect the characters in The Grapes of Wrath? 2. How did the characters deal with these circumstances? What did they do?
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