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today we're going to review the causes of the Great Depression as we go through the PowerPoint slide please note that I have gone through and anything that you can find in the vocabulary section of your worksheet is in red and anything that is referring to dates and events on your worksheet is in blue you're welcome you all right so the first thing we're going to look at is overproduction of goods so we've talked about this before Americans love stuff so of course we're going to be increasing the amount of stuff we're making after the Industrial Revolution and World War one so many industries began to struggle in the 1920s railroads steel textile coal and lumber profits definitely dropped even the big businesses like we talked about Ford Goodyear they're struggling as well the housing industry began to slow down so we saw all the tenements and the suburbs being built around the beginning of the 1900s before World War one and now we're starting to see a slow in that development of course all the people filling these jobs is also going to decrease if the companies don't have the money to pay them some industries however continue to produce leaving unused goods which we call surplus so this is extra stuff that people just aren't buying here are some examples of what those look like these are some major industries Pennsylvania we have the steel mills remember Carnegie and his steel we have coal mines which was a major industry in the northeast places like Virginia North Carolina and then sawmills so all that untamed frontier were we using wood buildings and homes all right also we have an agricultural crisis so during World War one the demand for crops soared prices increased which means farmers were making good money however after World War one we start running into problems so farmers started planting more crops so they had to take out loans for their supplies and equipment because there was a demand once that demand is gone that's where we're going to see a problem in the 1920s so once World War one was over we start seeing people having a surplus of crops so demand drops 30% farmers who had been increasing production the surplus was created and prices fall even more fire farmers could not pay back their debts to the banks banks would foreclose or take the property in the homes of these people lived in to settle the debt that they were owed on bones even small banks in rural areas which you guys will remember is out in the country outside of the city they started to fall fail as well Congress tried to help however at such a magnitude and all of the other problems that are occurring at this time there was only so much they could do all right uneven distribution of income so uneven means that it is not fair it is not equal and that's what we're going to see an increase of during the 1920s so things were going great when we were talking about that booming period where you have you know sports races sporting events concerts movies all those really cool things that we learned about last week in the week before there was an increase people had extra money however as we move out of the 1920s into the 1930s we start seeing problems so the wealthiest people began getting wealthier okay while the people that were poor continue to get poorer so what was happening is people working jobs they were getting paychecks however the cost of goods and the cost of living was increasing in the pay of those lower level workers was not increasing so that affects our standard of living your standard standard of living is what an average family needs to make in that area for education poor their bills their food and the overall well-being of those individuals so obviously different places have a different standard of living but back then the standard of living the average was 2,500 a year can you imagine now 2500 is maybe half of what most families need to survive in a month all right many struggle to buy the necessities that they needed and when I say necessities I'm not talking about cell phones and Internet I'm talking about food maybe coal or oil to heat their homes in the North milk basic food for children medicine those are the necessities were talking about not iPhones Beats headphones Xbox the things that you might think is necessary today most Americans did not have electricity at this point which when you think about the amount of industry and growth we had from the 1900s the 1920s you think more people had electricity but most still were using coal so the coal industry was barely hanging on due to the fact that most Americans not yet have got electricity all right consumer debt so consumers are the people who buy goods or services and debt is money that you owe to somebody so many Americans were purchasing new Goods and banks were making credit available so this is the first time we're going to see formal lines of credit through banks and not through underground groups consumed like I said consumers are the people who buy products are goods and they did not have the cash to buy these things Americans want more things we see the increase of appliances we talked about men's suits women's dress they're starting to buy things that they don't necessarily need for survival so they're borrowing money and anytime you borrow money you have to pay back with interest okay these are fees for borrowing and taking someone else's money with a promise to pay it back oh yes a shiny new car that would be something that people would put on credit all right so we have all these people who are putting things on credit however job losses and lower wages is not going to help with this repayment workers wages or pay remains stagnant or even decreased during this time going into the 1930s prices of goods and services increased like I mentioned a couple slides ago Americans did not have the extra money to spend in many struggle to pay back that debt that they owed guys this is something that is very reflective of our current situation and pandemic people who have jobs maybe got cut or do not have jobs anymore but they still have money that they owe to people for their car their house credit cards and this is a situation that happened in 1920s here we are hundred years later and we are seeing a similar trend due to unforeseen circumstances businesses were left with a surplus of goods that they couldn't sell so they had manufactured products but there weren't people to buy them this is not a good situation hopefully we are not going to see such a loss as during this time as we come hopefully near this pandemic but at this time this was really bad for the economy all of these things were creating layers of problems which is what's going to lead to our Great Depression pay workers were laid off they saw less hours which made less pay people were living in shacks multiple people in one room apartments they would make their own like homeless happens basically all right what a great time for an election good luck you're the president as the economy is falling in 1928 so people were trying to be optimistic we have Republican Herbert Hoover against Democrat Alfred Smith Hoover had less experience however he was the Secretary of Congress so people believe that maybe he could pull this out maybe he could get America back into an upswing of the economy back into that boom period Hoover gained the votes and he won he promised to keep the country strong all right so let's add another layer to what's going on right now heading into the 30s the stock market some things were going really really well the prices began to rise steadily people were investing in the stock market and what a stock is that it's just share or ownership in a company so you could buy stock and Google you could be a part owner of Google all right by 1923 3% of Americans own shares of stock so that's a relatively low number most were already wealthy but there were still some others that were everyday people that were just hoping that big winning company the get rich and had all this time and effort pay off many people however bought stock on speculation which means they didn't have any concrete data or information that this company was going to do really well some borrowed money to buy stock so they are taking out credit I stopped hoping the company will increase in value and not decrease in value doesn't sound like a very good idea to me the government did not regulate the stock market at this time the stock market continued to climb and climb but it was not all a reality that it was going up people were putting money into it however these companies were not getting wealthy at this time and that's what we're gonna be is the problem so in that's part of what beats in the stock market crash so companies are appearing to be worth more money than they are and if you're a company that is selling goods and your goods are sitting in a factory obviously you're not gonna be making money September 1929 stock prices fell and some investors sold ok so those are probably more of your wealthy investors those are not your average joe's most people the common man was going to try to ride it out for the big payoff October 24th the stock market dropped a little bit more in more shares sold which made the price drop even more and then the final the actual thing that caused the stock market crash and signaled the Great Depression was on October 29th 18:29 the stock market crashes due to failing value this is the pivoting point okay so all these other things are adding layers this is the main event that is going to cause the Great Depression okay the bottom photo here you're going to see this is a crowd that's gonna form outside the New York Stock Exchange things got very violent people's money was gone there's a lot of uncertainty and what would happen next which added to the problems all right so October 29th 1929 is known as black Tuesday and this is where things went horribly wrong people didn't have access to the money the money invested in these companies was not - they're causing even more problems alright so people who bought stock on credit they were left with high debt and worthless shares in a company so basically you paid your money for a piece of paper and if you are only making you know a thousand dollars a year remember we talked about the standard of living was one thousand two hundred and fifty dollars if you're only making 1,000 dollars a year and you best it a little bit into this stock that's a huge hit for your family and their survival um by the following month so in November investors had lost 30 billion dollars that is a lot of money back 30 billion dollars is a lot of money today literally everything your family had is gone alright so obviously people are not happy okay only ninety percent of Americans had money in the stock market but everybody felt the consequences because now that debt that people owe is not being paid these companies are not able to pay their workers and unable to pay their loans to the bank which is creating a snowball of problems so people panicked this is my money I want my money I'm gonna go get my money out of the bank and they could not get their money out of bank funfact banks don't keep all the money in one location that'd be kind of silly right so here let's say you have two hundred people who have $10,000 in the bank okay they do not have that much money sitting in the vault to be withdrawn that day so this creates more problems more chaos every day people are freaking out we didn't have anything to do with the stock market they just want their money and this creates a huge problem eleven thousand banks fail hey people lost all their money can you imagine going to the bank and you think you have $5,000 in the bank goes sorry we don't have that and they closed the next day and your money has gone forever $5,000 okay might not seem like a lot of money to some of these celebrities but to everyday people that's a lot of money and that's what happened so there was rioting there were people going crazy in the streets because they are not sure how they're going to survive now we have federal protections on that all of your money is insured to the FDIC so the federal government now has protections on our money to try to make sure nothing like this ever happens again so while it was quite tragic and horrible for these people at the time it has created safeguards for us today many people like their money is gone they have no way to feed their family companies are closing we see an increase in soup kitchens and red lines 90,000 businesses went bankrupt which obviously is not good the gross domestic product or GDP is the total value of us goods and services that we produce in a year so that dropped we also have unemployment increasing so unemployment increased 20 percent and like I said soup kitchens and bread lines become more common before this time period as we learned in the early 1900's there were some agency set up to help the poor or immigrants coming from countries living in the ghettos but now this is everyday people who are having to go to bread lines and soup kitchens to help provide for their families all right so it wasn't just in America that this depression happened okay it was a global we are all connected especially at this time you have other major manufacturers in the world that we buy and sell goods with so America wasn't able to send the goods like they normally would and we weren't able to buy the goods from the other countries of course this is going to create problems in those countries as well so it was kind of like a ripple effect around the world once the stock market of the United States crashed it created problems for other Western countries 19:30 we see the passage of the smoot-hawley Tariff Act it raised taxes on imports trying to get Americans to buy more American goods seems like a good idea but probably not good for international relations and people weren't able to pay for American goods because the cost of those goods also increased alright unemployment increased around the world and many countries raised their tariffs which is just compacting the problem and making it worse for everyone overall world trade decreased by 40 percent by 1933 so we are talking about three years after the stock market crash we have a decrease of 40 percent in global trade alright guys so hopefully that helps you understand one thing you could do is you could run through this again and have me talk and you could go through the vocabulary or the key dates and events I have gone through and highlighted everything for you please let me know if you have any questions and I will catch you on the flipside