Objective

1) List and describe at lease three effects of the depression in a writing activity.

Pair Share

• What is a depression? What made the Great Depression significant to American History?

Speculation

1) Many Americans believed that buying stocks was a sure way to get rich quick.

2) Speculation: making risky investments in hope of gaining profits.

Margin 1) Margin: paying for the stock in

cash and in credit.

Bank

Broker

Client

The Stock Market Crashes• The steady growth of the early 1920s gave way to astounding gains at the end

of the decade until its September 3, 1929, peak.

• Many people were beginning to see trouble as consumer purchasing fell and

rumors of a collapse circulated.

• On Thursday, October 24, 1929, some nervous investors began selling their

stocks and others followed, creating a huge sell-off with no buyers.

• Stock prices plunged, triggering an even greater panic to sell.

• Toward the end of the day, leading bankers joined together to buy stocks and

prevent a further collapse, which stopped the panic through Friday.

• But the next Monday the market sank again, and Black Tuesday, October 29,

was the worst day, affecting stocks of even solid companies.

• The damage was widespread and catastrophic. In a few short days the market

had dropped in value by about $16 billion, nearly one half of its pre-crash value.

Imagine you were alive during 1929, write a short journal entry for October

29, 1929 (Black Tuesday).

How does a Stock Market Crash• Stock prices drop when more people are selling than

buying.

• On October 29, 1929 (Black Tuesday) everyone was selling and no one was buying, forcing prices down

• $16 billion lost in one day (=$180 billion today)

• Today– On September 29, 2008, stocks have biggest loss ever of

778 points, which is equal to $1.2 trillion– How does that loss compare to Black Tuesday?How does that loss compare to Black Tuesday?– Video

Bank Failures

• 2008 – 25• 2009 – 140• 2010 – 152• 2011 – 25 • Total = 342• 2003-2007 - 11

Citi Bank – (1987-2009)

Bank Failures1) Bank failures contributed to the

severity of the depression.

2) American families that saved for homes and retirement were left penniless.

3) From 1929 to 1932 nearly 5,000 banks failed.

4) Do we worry about bank failures today?

                                                                                  

Unemployment

1) By 1932 unemployment had reached about 25%.

2) Bread lines were established to feed the hungry.

3) Unemployment, low wages, and bank failures all led to the number of homeless people.

Have you, your family, or someone you know been effected by what has been called the Great Recession? How has the poor economy affected your life?

                                                                                    

Illustrate the an effect of the Great Depression.

Closure1) List and describe one major cause of

the Great Depression.

2) How did the bank failures affect Americans?

Effect

Chapter 11 – The Great Depression Begins

Use page 326-327

Cause: Great

Depression

Chapter 11.2

Hoover and the Great Depression (11.3)

Effort Description (include the year it was created)

Associative State

Cooperatives

Reconstruction Finance Corporation

Federal Home Loan Bank

Smoot-Hawley Tariff

Quiz1) Homeless camps were called this.

2) On October 29th, 1929 this happened.

3) This person was president at the beginning of the depression.

4) The Midwest that was hit by drought and farm losses was called this.

5) Unemployment rose to _____ % by 1932.