Name: Keyona S.

Class and Period: 3rd Block

Date: 12/5/24
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Topic (Lesson Title): Causes of the Depression
Warm Up:
1. How did World War I affect the culture of Americans at the time?
The war was a boost for the great migration of African Americans, and those who returned
from the war, finding inequality intact, demanded civil rights. In addition, the conflict
signaled the rise of conscription, mass propaganda, the national security state, and the FBI.
2. Why were people spending so much money in the 1920s?
The prosperity of the 1920s led to new patterns of consumption, or purchasing consumer
goods like radios, cars, vacuums, beauty products, or clothing. The expansion of credit in
the 1920s allowed for the sale of more consumer goods and put automobiles within reach of
average Americans.

Questions and Key Points Class Notes

What was the Stock Market ● The Stock Market Crash(1929) - Was considered the
Crash? What was Black main stressor of the Great Depression.
Tuesday? - Billions of dollars lost in a single day
- Following this was Black Tuesday…
● Black Tuesday: Where America and the rest of the
How did the First World
industrialized world spiraled towards the Great
War impact people’s
Depression
spending habits during the
● The Roaring 20s Credit - The new concept of “credit”
1920s?
emerged during the 1920s →“Buy now, pay later”
- People were buying many goods like automobiles, appliances,
Why was Credit dangerous?
and clothing
- Fun and pleasure were prioritized over survival
How was wealth - Extra money earned was used to enjoy life (dancing, clubs,
distributed? Was it fair? sports, driving vacations) instead of investing in the future
- The carnage of World War 1 reminded people that life was
Why did people panic about short and encouraged this thought process
the decrease in the value of ● Problems regarding credit include:
stocks? 1. The Credit System was new
- People didn’t have the money they were spending
2. World War 1
How are the people feeling
- The US was a major credit loaner to other nations in need
so far with this decline? - Many of these nations could not pay back the US
- Cushion money was loaned out and could not be used to
What was the Dust Bowl? provide relief when the economy turned down
3. Easy Money (Credit)
What is over-speculation? - Interest rates on loans were too low = too much borrowing
- Borrowing interest rates on savings were too low = too
much spending →Leads to inflation
 Why did the banks fail? - Excessive Real Estate Construction = oversupply
- Time payments begin in the 20’s
Who was elected in 1928? ● Wealth Distribution - Corporate profits rose 65% during
How did his presidency the 1920s
handle the Great - The rich became much richer during this time while workers’
conditions only improved slightly
Depression?
➔ Many were poor & very few were rich - Workers
earned so little that they couldn’t buy the products they
Explain Laissez-Faire. produced
➔ Wages were as little as 20-25 cents per hour - Even the
Explain the Business Cycle. best employer Ford Motor Company paid only $5.00/day
for a 6 am-6 pm shift
What did the government ➔ 1920s-1930s Salaries - Bus Driver (no power steering
do to deal with the or brakes) = $1300 or $0.43 per hour
depression? What should ❖ Teacher = $1227
they have done? ❖ Waitress = $520 or $0.20 per hour
❖ Farmhand = $216 or $0.07 per hour
What happened when the ❖ Farm Prices - $0.01/pound potatoes, $0.05/pound
government passed high cotton, and $0.05/pound pork
tariffs on foreign goods? - First minimum wage = $0.25 per hour
● The Stock Market - People bought stocks on margins
(credit)
- If a stock is $100, you can pay $10 now and the rest later when
the stock rose
➔ Stocks fall - Now the person has less than $100 and no
money to pay back
➔ Investors panic about their money and try to sell their
stocks
- This leads to a huge decline in stocks
- Stocks were now worthless
➔ People who bought on “margins” now could not pay
➔ Investors were average people that were now broke
● Overspeculation - “Get rich quick syndrome” →Buying
on margin (on credit)
➔ Lack of Government Regulation
- Stocks were worth more than the actual value of the company
➔ Panic Selling
- When economy started to slow, people rapidly sold their
stocks
➔ Leads to the 1929 Market Crash
● The Great Dust Bowl - Overuse and overgrazing (with
no crop rotation)
➔ No soil conservation
➔ No wind breaks
➔ Loss of natural grasses & animals
➔ A huge drought of the ‘30s
 - This leads to the soil becoming like dust- severe dust storms
would greatly damage agriculture, ecology, homes and even
the health of those living in the Great Plains

Reflection Question: What caused the Great Depression? Could it have been avoided- how?
The Great Depression in America really kicked off with that crazy stock market crash on
"Black Thursday," October 24, 1929. That day, 16 million shares were sold off as panicked
investors lost faith in the economy. The Federal Reserve could have stepped in to stop the
whole thing from spiraling out of control - they could have prevented the banking system
from collapsing or pumped more money into the economy. But for some reason, they didn't
do anything about it, and that just made the whole situation a whole lot worse.

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