Warm Up #1
!  Agree
or Disagree: “All good things
come to an end.” Why or why not?
Causes of the
Great Depression
FLT: I will be able to explain
the causes of the
Great Depression
From Roaring 20’s to
Depressing 30’s
! 
Several events changed the U.S.
drastically between the 20’s and 30’s
! 
So long Roaring 20s… here comes
the GREAT DEPRESSION
! 
What caused the Great Depression?
People got
S.C.R.E.W.E.D.
!  S.C.R.E.W.E.D.
is an acronym for the causes of
the Great Depression
https://www.youtube.com/watch?v=wAZRpAO1z4
1. Stock Market Crash of 1929
! 
! 
Companies need investors to help them grow
!  People invest by buying stocks, or part
ownership of the company
!  This happens at the New York Stock
Exchange (Wall St.)
The market CRASHED on
Oct. 29, 1929
= Black Tuesday
2. Crisis for farms
Agriculture suffered the most during the 1920s.
!  After WWI, the demand for farm products fell
and crop prices fell by 50 %.
!  Farmers went into debt, couldn’t pay off loans,
and lost their homes
! 
3. Rich Get Richer,
Poor Get Poorer
! 
! 
! 
During the 1920’s, the income of the wealthiest
1 percent of the population rose by 75%
More than 70% of American families made less
than the minimum standard of living
Unequal distribution of income
" Majority of consumers spending less
" weakens economy
4. Easy Credit availability
! 
! 
! 
Americans in the 1920’s seemed rich,
but they actually weren’t
They were living on credit – buy now,
pay later (IOU)
Americans piled up huge debt!
" Consumers spending less
" Weakens economy
5. War debts/tariffs cut
foreign trade
U.S. was not the only one in depression
since many suffered from war damages
!  Hawley-Smoot Tariff Act designed to
protect American farmers and businesses
from foreign competition through taxes
!  Many tariffs worldwide
" fallen world trade
" weakens economy
! 
6. Economic Boom Industries
in trouble
! 
A number of basic key industries struggled:
! 
! 
Railroads were losing business to new forms
of transportation. (i.e. the automobile)
Industries like coal mining expanded during
wartime, but no longer in high demand after
the war
7. Dow Jones “lies”
! 
! 
Dow Jones Industrial Average: a measure of
the stock market’s health based on the the top
30 large firms
!  During the 1920’s, the Dow showed high
rising stock prices = “bull market”
!  Many Americans (and banks) invested in
stocks based on speculation and began
buying on margin (loans to buy stocks)
The speculation was wrong
" Huge debts; banks fail and close
" Stock Market Crash of 1929
Causes of the Great Depression
S tock Market Crash of 1929
C risis for farms
R ich get richer, Poor get poorer
E asy credit availability
W ar debts/tariffs cut foreign trade
E conomic boom industries in trouble
D ow Jones “lies”
S.C.R.E.W.E.D. practice
! 
Use your notes and partner to help you
complete the matching practice of the causes
of the Great Depression
This handout goes on pg. 5 of your notebook.
Paragraph Response #1
! 
Explain the causes of the Great Depression
(S.C.R.E.W.E.D.). What events led the U.S.
to change drastically from the Roaring 20’s to
the Depressing 30’s?