If the Great Depression happened today, what do you think would be the first cost cuts you and

your family would make? Which cuts would have the strongest impact on your life?

The United States economy enters a recession. People began to spend less money, so there were more unsold goods on the shelves. This slowed down the production of new goods. Wowie Econ Intro

There are several reasons why the Great Depression occurred. Can you think of any?

 Black

Tuesday

October 29, 1929

The most devastating stock market crash in United States history.

On

Black Tuesday, the stock market Dow Jones Industrial Average went down 23%
The Stock Market Crash 1929

 People

began to lose faith in the American capitalist economic system

Taking money out of the stock market

 People

were beginning to cut back on their spending. Companies were still producing the same amount of products, but were selling less In order to sell their products, companies had to lower the prices, causing them to

Where do you see producers making too much of a good with not enough people buying it?

 Banks

invested money into the stock market When the stock market crashed, people fled to the banks to get their money The banks did not have their customers money because they lost it in the stock market.

 Investors

borrowed money from banks to invest in the stock market The stock market crashed People fled to banks to get their money out of their accounts The banks, who were also investing money in the stock market, lost all their money and could not give any to customers The banks still expected customers with loans to pay their debt.

 Dust

Bowl American Economic Policies in Europe (tariffs)

Banks failed High rollers in the stock market were bankrupted Over 9 million people lost all their savings

EFFECT: People begin to economize and cut back on their spending.

EFFECT: Demand for goods decreased. Businesses began to cut costs too, and laid off workers.

 During

the first 4 years of the depression

6,000 banks went out of business 9 million savings accounts vanished 85,000 businesses went bankrupt 13 million people were unemployed 400,000 farms were repossessed by banks 2,600 schools were closed Admissions to state mental institutions went up 300% 2 million people became homeless Suicide rates went up by 30%

You are an immigrant from Romania who moved to the United States in 1928. A new life in America seemed very promising to you and your efforts to support your family of a wife/husband and two children. You took on a job working in a factory. On October 29, 1929, the stock market crashed, and you lost your job shortly after. In the space below, write a letter to your family back in Romania explaining to them your feelings and the situation you are in. What do you do now? How has the depression changed your everyday life?(Challenge: Try to make speeches emotional)