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Great Depression

Great Depression. What were the causes of the Great Depression, and how did it impact Georgia?. Georgia is already there! . Because of the problems caused by the boll weevil and the drought, Georgia was already in a depression.

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Great Depression

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  1. Great Depression What were the causes of the Great Depression, and how did it impact Georgia?

  2. Georgia is already there!  • Because of the problems caused by the boll weevil and the drought, Georgia was already in a depression. • SO the Great Depression that swept the U.S. and the world really didn’t impact Georgia much. Can it really get any worse?

  3. Overborrowing Cause (Overborrowing) Effects • People and businesses borrowed more money than they could afford to repay. • Banks and businesses did not get payments on loans. • Banks stopped lending money. • Businesses laid off workers. • Businesses and banks failed.

  4. Industrial Overproduction Cause (Overproduction) Effects • Factories produced more goods than they could sell. • Businesses had to slow down production. • Prices dropped. • Loans were not paid. • Workers were laid off. • Businesses closed.

  5. Agricultural Production Cause (Agricultural) Effects • For many seasons farmers had produced too many crops. • Prices dropped. • Farmers lost money. (couldn't pay loans) • Farm-related businesses closed. • Farmers try other jobs. (industry)

  6. Tariffs Cause (tariffs) Effects • High taxes on imported goods • Other countries could not afford to buy American products. • Other countries could not sell to the U.S.

  7. Stock Market Speculation Cause (Stock Market) Effects • People bought stocks only paying a portion of the price hoping the value would go up, and they would repay later. • People borrowed money to buy stocks. • Stock prices went up making the price of the stock higher than its actual value. • The market crashed on October 29, 1929. • Many people lost money.

  8. Bank practices Cause (banks) Efect • Banks loaned too much money to people and businesses who could not pay it back. • Banks purchased large amounts of stock. • When the market crashed, banks lost money. • Many people tried to withdraw their money all at once (bank run). • Banks failed, many closed. • People and businesses lost their money.

  9. Credit Cause Effect • People borrow money to purchase goods with the plan to pay it back later. • If people have very few debts, credit is not a bad thing. • BUT if people have a lot of other debts, credit can be dangerous. • Pay interest on the amount owed (debt) • Excessive borrowing can cause interest rates on debt to go up. • Many people lost jobs which led to inability to pay debts which leads to high interest on the debt.

  10. Hoover’s response Cause Effects • Laissez-faire • Do nothing and trust that the economy will recover on its own • Hoover believed that balancing the budget was the top priority, so he raised taxes. • The economy did not improve. • Things got worse. • The gap between the rich and the poor got wider.

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