Causes of the Great Depression

Causes of the Great Depression

The Roaring Twenties

• The US economy was awesome

• 11,000 Americans were millionaires

• The US economy was called the 8th wonder of the world.

This scene from the movie Jerry Maquire sums up the attitude of Americans in the 1920s

Multiple Select

Which of the following goods could Americans buy in the 1920s?

• Televisions

• radios

• cars

• computers

• telephones

Poll

What would you have wanted to buy the most in the 1920s

• home appliances like a stove, washer, or vacuum

• car

• radio

• telephone

• clothes, lots of clothes

But then this happened

Multiple Choice

based on the last few slides, what happened in the US at the end of the 1920s?

• The US went to war

• terrorist bombings hit America again

• Americans lost their jobs and could not find new ones

• All of the above

Multiple Select

Did things get so bad parents had to sell their children or is this FAKE NEWS!

• Fake News, there is no way.

• It is a real picture

The Dust Bowl destroyed farmland

Homeless families on the move but to where?

Families had to live in shacks

So what went wrong?

What caused the Great Depression?

Multiple Choice

True or False

During the 1920s, The richest 11,000 families in America had the same amount of money as 11 million poor families?

• True

• False

Multiple Choice

The richest 5% of Americans had how much of America's wealth (money)

• 5%

• 26%

• 33%

• 55%

Cause #1 - A lack of income (money)

• People were working in the 1920s

• However, a lot of them made less than $1,500 a year.

• That wasn't enough money to keep buying things

• so how did they buy cars, radios, and home appliances?

Multiple Select

Did credit cards exist in the 1920s?

• yes

• no

Americans owed General Motors nearly $850 million dollars on cars they had bought. 

Multiple Select

How did many Americans buy cars, radios and other consumer goods in the 1920s?

Check all that apply

• they used credit cards

• they used installment plans (buy now, pay later)

• poor people didn't buy things, only rich people did.

Cause #2 - Easy Credit

• People borrowed $ from banks

• They bought goods on credit

• They spent a lot more money than they should have

Multiple Select

The easy credit of the 1920s led to Americans

• having massive debt they could not pay off

• saving lots of $ for the future

Cause #3 Overproduction

• Companies were making goods

• Americans were no longer buying them

Multiple Select

What happens when companies cannot sell their goods.

Check all that apply

• They lay off workers (fire them)

• They make more goods

• They lose $

• They close their factory

Multiple Choice

During the 1920s, if you lost your job you could collect unemployment insurance ($) until you found another job

• TRUE

• FALSE

Multiple Choice

During the 1920s, people could collect welfare?

welfare is when the government gives you money so you can buy food, pay rent etc.

• TRUE

• FALSE

Cause #4 The Stock Market Crash

• Companies sell shares of stock to make money

• A share of stock might cost $100

• Most people paid $10 a share and borrowed the rest ($90)

• So how do you make money in the Stock Market?

How to make $

• Buy low $10 a share

• Sell high $100 a share

• Shares of stock go UP when a company is doing AWESOME!

• A lot of companies were doing awesome in the 1920s

• People bought a lot of stock

Why did the Stock Market Crash

• By October 1929, companies could no longer hide the fact that they were not doing well

• Profits were down

• workers were getting laid off (fired)

• People that had bought stock began to panic.

That led to a Panic!

• People called their stockbrokers and told them to sell their shares of stock

• Prices of stock began to go DOWN!

• Everyone was trying to sell their stock

• A Panic began

• The Price of stock crashed

Black Tuesday October 29th 1929

• stock that was worth $45 a share fell to just $5 or even less.

• People lost tens of thousands of dollars, some lost millions.

• They now had no way to pay off their loans.

What happened next?

• companies lost $

• workers got laid off

• People couldn't pay back loans

• Banks began to close

• Factories began to close

• The Great Depression began

Multiple Select

Which of the following were causes of the Great Depression?

check all that apply

• easy credit

• companies weren't making stuff to sell

• Overproduction of goods

• The Stock Market Crash

In summary, here are the causes of the Great Depression

• a lack of income ($)

• Easy Credit = debt

• Overproduction of goods

• The Stock Market Crash

Poll

During a depression where jobs are hard to find, the government should give people money to buy clothes, food and pay rent?

• yes

• no

Poll

During a depression, the government should create jobs for people, even if the jobs are simple jobs that don't pay a lot of $

• Yes

• No

Poll

During a depression, the government should tax rich people more and use the money to help the poor

• Yes

• No

• not sure

Poll

If people cannot afford to pay their home loan during a depression, they should NOT lose their home.

• Yes

• No

• Not sure

Open Ended

Explain two reasons why the Great Depression happened.