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The Great Depression From Boom to Bust

The Great Depression From Boom to Bust. “Brother, can you spare a dime?”. Buy Now, Pay Later. People wanted the new products of the 1920s, but didn’t always have the cash to pay for them Credit developed to allow people to “buy now, pay later” Consumers built up so much debt

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The Great Depression From Boom to Bust

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  1. The Great DepressionFrom Boom to Bust “Brother, can you spare a dime?”

  2. Buy Now, Pay Later • People wanted the new products of the 1920s, but didn’t always have the cash to pay for them • Credit developed to allow people to “buy now, pay later” • Consumers built up so much debt because they kept trying to buy all the new products • Factories overproduced • Consumers couldn’t buy everything

  3. The Stock Market & Credit • Speculation: investing in risky businesses in hopes of making a large profit • On margin: paying a small percentage of the total price of a stock with the “promise to pay” the rest at a later date • It was the equivalent of buying stocks on “credit”

  4. The End of Prosperity • Black Thursday: October 23, 1929, stock prices dropped, and within hours, investors lost more than $5 billion. • Black Tuesday: October 29, 1929 people tried to go to the bank and withdraw any/all money they had. • Long lines, bank doors were locked, banks had to close because they didn’t have the cash to give out. • This was the start of the Great Depression

  5. The Great Depression • Worst and longest economic collapse in the history of the modern industrial world • Lasted until the early 1940s • Spread from the US to the rest of the world, impacting all industrial countries. • Decline in the production & sale of goods • Rise in unemployment • Businesses and banks had to close • People lost jobs, savings, homes • Many people depended on charity

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