The Great Depression. Recap 1.What do you remember about the Roaring 20s?

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Roaring 20s 1.The Roaring 20s was a time of major change in the United States. 2.Perhaps the most important change was that of the economy. 3.America became an extremely wealthy nation.

Transcript of The Great Depression. Recap 1.What do you remember about the Roaring 20s?

PowerPoint PresentationRoaring 20s
The Roaring 20s was a time of major change in the United States.
Perhaps the most important change was that of the economy.
America became an extremely wealthy nation.
Drawback
During the Roaring 20s many people spent money they did not have.
They bought on credit and on margin.
Buying on Credit
Buying on credit is when someone borrows money from another person or company.
The person borrowing money through credit can buy what they want or need now but they have to pay the money borrowed back to the lender of the money.
Buying on Credit Example
Here’s an example:
Jamie has a credit card with her bank.
She really wants a pair of shoes but does not have the money available until she gets paid at the end of the month.
She uses her credit card to buy the shoes now and she pays the bank back when she gets paid.
Stock Market
The Stock Market is what helps run America’s economy.
A stock is a share of ownership in a company.
So a stock market is a place where stocks are traded, bought, or sold.
Buying stocks can help or hurt your chances of making more money.
You should seek a financial advisor if you ever decide to buy stocks. It can be a very risky move!
The New York Stock Exchange – Where stocks are bought, sold or traded.
1929 Today
Ford is a company that makes cars.
Let’s say Jesse is hoping to make more money so he buys a stock in Ford in 2012.
In 2012, Ford has an excellent year in sales thus increasing the value of the company. Jesse gains money because he partly owns Ford.
In 2013, Ford has a horrible year in sales thus decreasing the value of the company. Jesse loses money because he partly owns Ford.
You can gain or lose money in the stock market.
Buying on Margin
In the 1920s, the stock market gained a lot of attention.
It was reported that people were making millions of dollars by buying stocks.
Many people who could not afford to buy a stock bought on margin.
Buying on margin is sort of like buying on credit. The people buying stocks put down a small down payment and the rest would be covered by a stock broker.
A stock broker was like a credit card company. They lent money out to people.
So if a stock is worth $100. A person could buy on margin by paying $20 while the remaining $80 is covered by the stock broker.
This became a popular, yet extremely risky, decision.
Stock Market Trouble
Many people bought stocks in the 1920s and forgot one important thing…
The stock market always changes like a rollercoaster. One minute going up and the other minute going down.
Stock prices began to drop in 1929 that people began to lose money.
When news of this hit the nation, everyone who had stock began to panic thus selling their stocks.
It was equivalent to yelling “FIRE!” in a crowded movie theater. Everyone panics and runs for the door.
Stock Market Crash
Absolute Chaos
When the stocks began to be sold all chaos broke out.
Brokers who lent out money demanded to be repaid but could not.
People ran to the banks in hopes to get their money but the banks ran out of money.
In one day alone, 16.4 million stocks were sold collapsing the entire stock market.
The market ended up losing $30 billion overall.
Crisis
With the stock market collapsed and banks out of money, the country entered the Great Depression.
Many people had no money left.
No money for a country = poverty and unemployment.
Poverty and Unemployment
Poverty is when a person or family has little or no money to sustain themselves.
Unemployment means that a person is not working.
Both of these things increased during the Great Depression.
Hooverville
Many more became homeless during this time and built shantytowns which were homes built from scrap metal and wood.
These were poor living conditions.
The term “Hooverville” was named after US President Hoover who most Americans blamed for the Depression.
President Hoover did not do much to help America fix the situation.
Hooverville in Seattle, Washington.
America Enters the 1930s
Americans were had much prosperity during the 1920s but now in the 1930s they had much poverty.
Things got worse before they got better. The Depression began in 1929, the worst came by 1933 and the Depression would end in 1939.
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Check out the quote from a famous book below.
“Our people are good people; our people are kind people. Pray God some day kind people won't all be poor.”
John Steinbeck, The Grapes of Wrath
What do you think this quote means?
Can Things Get Any Worse?
Unfortunately, yes.
During the 1930s, and still today, Americans rely heavily upon the Great Plains for their source of crops.
However, there was a severe drought in the 1930s in the Great Plains.
Drought
A drought is when an area does not receive any rain for a long amount of time and dries up.
The Great Plains had one of the worst droughts which dried up all of their plants and fertile soil.
That’s not too bad, right?
WRONG!
After the drought came strong winds.
The winds picked up this dust and formed MASSIVE clouds of dust that rolled across the United States.
This was known was the Dust Bowl.
The massive dust clouds would reach eastern cities such as New York City and Washington D.C.
The visibility would be so bad that you could only see 3 feet in front of you. It was a darkness that even blotted out the sun’s light.
Dust Bowl Pictures
What Will Save America?
The country was on its knees looking for a way out of the mess they were in.
Two things helped the U.S. recover:
A new U.S. President and his ideas.
A major war.