Ch 13 Sec 2

QW

What are your strategies for saving money?

QW

If the stock market collapsed today, how would your family be affected?

What was the Great Depression? The worst economic crisis of the

century Over 13 million people unemployed “Dust bowl” as a result of drought Farmers lost crops Many lost their homes

What caused the Great Depression?

Unequal distribution of wealth Stock market crash of 1929

Unequal Distribution of Wealth

Limited middle class Supply not equal to demand Credit cards created false demand

THE STOCK MARKET

By 1929, many Americans were invested in the Stock Market

The Stock Market had become the most visible symbol of a prosperous American economy

THE 1929 CRASH

On October 29, now known as Black Tuesday, the bottom fell out

16.4 million shares were sold that day – prices plummeted

People who had bought on margin (credit) were stuck with huge debts

FINANCIAL COLLAPSE

After the crash, many Americans panicked and withdrew their money from banks

Banks had invested in the Stock Market and lost money

Bank run 1929, Los Angeles

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1928 1929 1930 1931 1932 1933

Bank Failures

In thousands

Unemployment

0

2

4

6

8

10

12

14

1928 1929 1930 1931 1932 1933

Unemployment (in millions)

0

5

10

15

20

25

30

35

1928 1929 1930 1931 1932 1933

Business failures (In thousands)

Loss of homes “Hoovervilles”

Here were all these people living in old rusted-out car bodies. ... One family ... [was] living in a piano box. This wasn't just a little section, this was maybe 10 miles wide and 10 miles long. People living in whatever theycould junk together. ..."

Dustbowls

A traveler noticed a nice new hat by the side of the road, and he stopped to pick it up. Under the hat was a man, buried up to his neck in the dust! As he dug the poor fellow out, the traveler asked if he wanted a ride into town. "No, I'll get there myself," the man replied, "I'm on a horse." (Excerpt from THE DUST BOWL by Tricia Andryszewski, p. 33.)

Depression

Did everyone suffer during the depression?

“The only thing we have to fear is fear itself”

“Our greatest primary task is to put people to work”

Franklin D. Roosevelt

FDR’s New Deal Relief for the needy Jobs provided Business and government reformed

People’s faith in democracy…