h24 - Great Depression Brother can you spare a dime? OBJ #1...

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Unformatted text preview: Great Depression Brother can you spare a dime? OBJ #1 - Describe the CAUSES and SPARK of the Great Depression. How did Overproduction affect both farmers and industry? What system collapsed and caused millions to lose their savings? Explain how buying on Margin created the Spark. How did people lose money because of the spark? I. OBJ #1- Cause & Spark of the Depression A. Causes of the Depression 1. Overproduction , too much stuff (Factories and Farms) a. Factory Workers begin to get layed-off- Workers cannot buy goods, even more goods are overproduced b. Farmers Cant Survive-low prices (cant pay loans / make a living) c. Supply & Demand- Prices Drop 2. Bank Failures a. Banks close and loose $$$ b. People default on loans (Cant pay Back) c. Banks cannot cover their deposits, because it was lent out to bad creditors ** 5,000 banks close between 1929-1932 ** d. People loose entire LIFE SAVINGS 1920s Problems Factories making Too Much, Farms growing too much Factories Fire Workers (Dont need them) Farm Prices fall (Farmers cant make $$) Farmers & Factory Workers cant pay back loans to Banks: DEFAULT!! Banks Close because they have no money: Loans have not been paid back, cant give people their savings BANKS Have NO $$ PEOPLE LOST SAVINGS & JOBS NO ONE TO HELP! = + People Default on Loans Banks have no money to give people Banks Close People Loose savings OBJ #1- Cause & Sparks of Depression B. SPARK!!! Of the Depression 1. Stock Market Crash, Black Thur. Oct. 29, 1929 a. Summer 1929, Investors begin to sell stocks b. Supply & Demand Again Massive Sell-Off and prices begin to ______ 2. How??? a. Buying on Margin (Borrowing $$)- Buy stock by just paying a small portion of what the stock is worth ex.- 100 shares at $10= $1000 only pay $300 still owe $700- Problem, stock crashes and you loose your money and cant payback stock broker- stock broker cant pay back bank OBJ #1- Cause & Sparks of Depression...
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h24 - Great Depression Brother can you spare a dime? OBJ #1...

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