Steps leading to the Great Depression
Economic Concerns Prior to Stock Market Crash:

Credit for purchases

Stock Speculation
(“playing” the market)

Margin Buying
(purchasing stocks with borrowed $)
Stock Market Crashes:
Black Thursday (October 24, 1924)
Rising interest rates make investors nervous
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V
Started to sell
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V
Too many at once
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V
Prices plunged
This was only the beginning…
Black Tuesday (October 29, 1924)
** By mid-November, value of stocks had been cut in half –
Stockholders lost $30 billion
Factors That Caused the Stock Market Crash
1.
economic factors such as rising interest rates
worry investors
2.
investors sell stocks
3. stock prices plunge
4.
heavy sales continue
DEPRESSION BEGINS
Events that Signaled the
Beginning of the Great
Depression
Stock Market Crash
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V
Provoked
Banking Crisis [read p. 716]
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V
Businesses Fail [read p.717]
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V
Leads to
Massive Unemployment
** All of this alone did not cause the Great Depression…
Causes of the Great Depression
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Banking Crisis
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-destroyed personal
savings
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Global Depression
Income Gap
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Consumer
Debt
- decreased purchasing power
of much of the population
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- increased
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instability
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- deprived
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debtors of $
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The Business Cycle
- decreased purchasing
ability of foreign consumers
- led to periodic down turns
Answer the following questions in your BINDER: [read pp.716-719]
1.
How did the stock market crash provoke a banking crisis, and how did the
banking crisis lead to business failures?
2.
What effects did the Great Depression have on the U.S. economy?
ASSIGN:
read section 2, chapter 24
--
do worksheet questions
(put in your binder)
U.S History
R. Letter
Section 2, Chapter 24 Questions
(put me in your binder  )
1.
How did poverty in urban areas create such a drop in agricultural prices that farmers let
their crops rot in the field?
2.
How did the hardships of the Great Depression further inflame racial prejudices against
African American workers and Mexican migrant farmworkers?
3.
How did the burdens of the Great Depression create the challenges to traditional beliefs
in the importance of family?