Great Depression: Cause & Effect

What were the signs of a weak economy
1. Old Industries (like coal and railroads) in decline but their stock price continued to rise (inflated stock values)
2. Agriculture prices were dropping due to overproduction
3. Worker buying power declined leading to overproduction

Buying on margin
Buying on margin
Purchusing stock with a little money down with the promise of paying the balance at sometime in the future

Black Tuesday Oct 29, 1929
The stock market crashed

A condition in which production of goods exceeds the demand for them

Why was there a banking crisis
Banks had loaned money to stock brokers and invested in the stock market. When it failed they failed. People then panicked to get their savings out of banks who did not have it leading to massive bank closings.

What was the downward spiral
Businesses laid off workers-workers spent less-businesses laid off more people and so on

financial failure caused by an inability to pay one’s debts

act of failing to pay back a debt (as in “defaulting on one’s loan)

How did the Great Depression spread world wide
Countries defaulted on debt to the US and the US stopped investing overseas so those economies collapsed also. The Tariff passed under Hoover’s Administration made things worse.

risky buying and selling of stocks in the hope of making a quick profit

extra payment for labor (WWI veterans were due a bonus in the 1940s by the federal government but they demanded it earlier due to the Depression)

stock market
Place to buy and sell stocks-it collapsed on October 29, 1929 after the bull market of the Roaring Twenties

people who want a job are unable to find one. The unemployment rate went higher than 25% by 1933

What did a slowdown in international investment do in Europe
It caused the depression to spread to Europe

Soup kitchens
Soup kitchens
A place people could go to get food who didnt have a job or enough money

President Hoover’s response to the Great Depression was
1. Very little direct relief at first, hoped it would take care of itself and encouraged private charities and local governments to help the people.
2. Quickly though he tried to use the federal government to jump-start the economy by encouraging the Smoot-Hawley Tariff and the creation of a Farm Board to help agriculture
3. Set up the “RFC” to give loans to businesses that would keep people employed
4. Set up the Public Works Project to give unemployed people jobs building things like the Hoover Dam
5. Tried to keep American confidence by ensuring that prosperity was “right around the corner” (people didn’t like that as more time passed living in their Hooverville shacks with no jobs)

Bonus army
Group of WWI vets. that marched to D.C. in August of1932 to demand the immediate payment of their goverment war bonuses in cash; After the Senate rejected the request, Hoover finally decided they must leave as radicals began to work among the Bonus Army stirring up trouble. When the police needed help the army stepped in and dispersed the veterans in an appaling display of force – this was of course was blamed on Hoover despite it disobeying his orders

What affect did the Depression have on families
1. Fathers left and families broke up
2. Divorce rate increased, marriage rate decreased, domestic abuse increased
3. People did not get proper nutrition and were sick more often
4. Children got less education

Laissez faire Idea that government should not interfere in the economy Hoovervilles Popular name for shanty towns built by homeless people during the great depression WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY …

The Stock Market Crash cause; The stock market crash that occurred on Black Tuesday, October 29, 1929 is NOT one and the same with the Great Depression. Over Speculation of Stocks cause; As the stock market soared, investors used their …

Speculation An involvement in risky business transactions in an effort to make a quick and/or large profit Buying on the Margin Buying stocks by borrowing money from a bank or broker; allowed everyday people to buy stock which in part …

Election of 1928 Alfred E. Smith (D) vs. Herbert Hoover (R), Smith was a Catholic, Republicans took credit for prosperity of 1920s => Republican victory in all but the south Stock Market Crash 1929; didn’t cause the Great Depression WE …

the day of the stock market crash october 29th, 1929 black tuesday another name for the periodic expansion & contraction of the economy business cycle WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY …

Herbert Hoover. Republican candidate who assumed the presidency in March 1929 promising the American people prosperity and attempted to first deal with the Depression by trying to restore public faith in the community. Alfred E. Smith. He ran for president …

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