Please do not talk at this time April 28

HW: Use Chapter 15, Sec. 2 to add to and perfect your flow charts

The Great Depression hit the world very quickly. Events spiraled out of control across the globe in only a few months. We’re going to look at some of the causes of the Great Depression.

As we go through the 6 Causes of the Great Depression, create a Flow Chart to show the Cause and Effect relationship of these events.

The horror of WWI caused many people to feel they should live life as richly as possible while they could.

Even so, 60% of Americans lived under the poverty level ($2000/year)

People made up the difference by borrowing money. They bought stocks on the stock market, and when they went up, sold them and used the profits to buy more stock.

Businesses saw all this imaginary money in the market and began to produce large amounts of goods, hoping people would buy them with credit from their stocks.

Eventually people realized that there wasn’t any actual physical wealth (gold, oil, diamonds, land, etc) behind the stock prices. They began to sell their stocks while prices were good.

This caused a panic in 1929. Banks who had given loans to people to buy stocks demanded their money back. People sold more stocks to pay off as much of their loans as they could. For the next 4 days, the Dow lost over 10% of its value every day.

Total losses for the four days: $30 billion, 10 times federal budget and more than the U.S. had spent in World War I ($32B estimated). The crash wiped out 40 percent of the paper value of common stock.

Thousands of people were left holding worthless stocks and millions in loans to banks.

After the stock market crash, bank were left with massive loans on their books that people would never be able to repay.

Without any money left to do everyday business, banks stopped lending, laid off employees and in many cases went bankrupt. There was no FDIC Insurance at this time, so when a bank closed, people lost all the money they had in the bank.

In 1929, there were 25,568 banks in the United States; by 1933, there were only 14,771. Personal and corporate savings dropped from $15.3 billion in 1929 to $2.3 billion in 1933.

At the end of WWI, Europe was in a terrible state. The Allies and the Central powers were bankrupt. Germany was burdened with massive war reparations. Britain and France needed to rebuild their infrastructure (agriculture, factories, transportation lines, etc) and populations.

The US was happy to lend money to these countries, first to finish WWI, and then to rebuild. They did this through loans.

However, once US banks began failing ... the banks not only stopped making loans, they wanted their money back. This put pressure on European economies, which had not fully recovered from WWI, contributing to the global economic downturn.

With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items.

But companies had a huge stockpile of items to sell already made, but not paid for. So companies stopped producing goods until they could sell what they had.

With the fall in production, companies didn’t need as many workers and had to lay people off.

As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate.

The unemployment rate rose above 25% which meant, of course, even less spending to help relieve the economic situation.

As businesses began failing, the government created the Smoot-Hawley Tariff in 1930 to help protect American companies from international competition. This charged a high tax for imports, making American goods cheaper to buy.

When Americans stopped purchasing goods from other countries, those companies began to collapse as well, putting more people out of work, so even fewer people could buy anything from anybody.

Other countries retaliated by passing their own Tariff bills, which had the effect of reducing world trade 66% and causing the Great Depression to spread to the whole world

Banks call in their loans from people and businesses

Banks close Banks lose LOTS of money Banks stop making loans Businesses close Companies lay people off Factories stop producing

goods Foreign businesses close Foreign countries can’t

finish rebuilding Foreign countries can’t sell

to other countries

Foreign people are out of work

Foreign people can’t buy products

Government raises Tariffs to protect businesses

People borrow money to buy stocks

People can’t buy products People can’t pay their

loans People lose their jobs People lose their savings Stock market crashes

Examples:To remember

the order of musical notes on a scale

Every Good Boy Does Fine

To remember the dangers of Trench Warfare- RAMP

RatsArtilleryMachine

GunsPoison Gas

To remember the order of math problems- FOIL

First termsOutside InsideLast

ACRONYMS can be long too:Post WWI Philosophies:Every Silly Eel Can Feel Lost

Einstein claims everything is relative. Surrealism paints our dreams and

nightmares. Existentialism means we create our own

reality. Cubism breaks everything apart before

putting it together again. Freud says desire rules us not reason. Lost Generation gives up all hope for the

future.

You and your team will be making ACRONYMS to remember the key information from the effects of the Great Depression.

Follow the procedure to create an ACRONYM on the most important information in your reading.

Read your page carefully and identify 5 -7 key pieces of information.

Think: What do people need to know for this to make sense?

Your information can be a phrase, sentence, statistic or other piece of important information. You can even shorten or combine information that goes together.Practice with the paragraph on your paper, What

are 5 – 7 key pieces of information from this info on the Great Depression? Underline them!

Consider your 5-7 key pieces of info. How could you write those more clearly?

Think: Trim the fat! Write out your information so you have only the essentials.

Write these on the place provided on your paper!

First consider your information. Must it go in a particular order (Like FOIL for math) or can the list of info be jumbled?

Now look at t he first letter of each statement. Can you make these into a word that makes sense?

If you can do that, great! If not, keep going…

Compose your ACRONYM on the bottom of your paper.

If you are stuck with a particular order or you can’t make a word out of your letters (no vowels can be a problem) try making a phrase.

Use the first letter of each statement as the first letter in a different word that is part of a sentence or phrase made up of all the words from all the first letters in the statements.

What does that look like again?

Every Silly Eel Can Feel Lost

Einstein claims everything is relative.Surrealism paints our dreams and nightmares.Existentialism means we create our own reality.Cubism breaks everything apart before putting it together again.Freud says desire rules us not reason.Lost Generation gives up all hope for the future.

You have a page on some effect of the Great Depression.

Create an ACRONYM for the most important information on that page.

You will share this with your team and the class will pick the best ones.

You may read your paper together and brainstorm what you think the most important information is, but please write your ACRONYM on your own.

I did NOT get the house. There was no actual crying. It

wasn’t meant to be.

Please get your colored handout from yesterday.

Please get out your ACRONYMS from yesterday. Are they good enough to help you with a Quiz?

Make changes as needed

Look at the LETTER on the top of your reading. This is your Jig Saw group!

Share your ACRONYM with them and get theirs on your paper until you have info from all 5 readings.

You will be able to use this ACRONYM page on your Great Depression Quiz!

Please use the back of your ACRONYM paper.

Number 1 -10

Quiz is a Class Set. Please do not write on it.

Trade papers with someone near by.Write Corrected by: and your name

on the bottom of the paper.Put a line through the answer if it is

wrong.Do nothing if it is correct.

1. D2. B3. C4. A5. C

6. B7. C8. D9. C10.A

Please add up the number correct and put that over 10 at the top of the page.