THE GREAT DEPRESSION

@ THE END OF THE 1920S

• US=largest economy in the world
• After WWI-Europe=devastated
• Herbert Hoover-believed poverty=almost extinct

WHAT CAUSED THE DEPRESSION?

• 1929- stock market crashed
• US business=expanded too far
• People had been buying o. Credit
• Banks=no guarantees to customers
• Agriculture prices fell & Europe=in depression too

THE MARKET CRASHES

• 1920s=stocks are growing '25-'29 (exploded)
• Stock fever- everyone=buying stock
• It's risky but they're also buying on margin
• Investors- can borrow $ to buy more stock
• Banks/stockbrokers- loaned $ @ huge interest rates

HOW DOES THE NEW YORK STOCK EXCHANGE WORK?

• Very complicated but...
• When people think a stock is valuable- they'll pay more
• Then... The value of that stock goes up
• If people believe the value is about to drop... They'll try to sell it
• Sometimes everyone does this @ once & they can't sell it

OCTOBER 1929

• People started trying to sell all of their stock
• Tycoons bought stock to try & prevent a collapse
• Tues. Oct. 29, 1929- the market collapsed
• Next few weeks... Value of the stock market=less than 1/2 what it was

1929-'33--- SINKING DEEPER

• 90% of Americans-didn't own any stock
• Short term consequences- loans go unpaid- banks fail
• Anyone w/$ in banks... Lost it all
• Families that bought new conveniences of the 20s- can't pay them off
• Businesses=layoffs- 1932- stock market=$15 billion

THE PEOPLE

• 1932-unemployment=12 million (25%)
• Many workers chose between pay cuts or pink slips
• Soup kitchens/charity=can't keep up b/c now they take care of middle class
• Depression=uneven across the country (Oklahoma-dust bowl)
• Blacks=double unemployment--- Mexicans=many go back to Mexico