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The Great Depression

The Great Depression. I. The Stock Market Crashes. Election of 1928 Herbert Hoover (Republican) Country’s prosperity associated with Republicans Government should stay out of business Bought farmers surplus crops to sell abroad. The Crash of 1929

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The Great Depression

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  1. The Great Depression

  2. I. The Stock Market Crashes • Election of 1928 • Herbert Hoover (Republican) • Country’s prosperity associated with Republicans • Government should stay out of business • Bought farmers surplus crops to sell abroad

  3. The Crash of 1929 • People buying stocks and bonds rose steadily during the 1920’s • Speculation – buy stock and hope price rises; and then sell for a profit • People bought stocks on margin – borrow money to buy and then pay back with profit • October 29, 1929 (Black Thursday) prices dropped investors sold stock; market crashed • Banks lost the money loaned to buy stocks

  4. People stopped buying goods, production slowed, jobs cut, mortgages couldn’t be paid, property lost • Cause of the Great Depression • Overproduction: more goods produced than consumed • Under Consumption: insufficient buying power to support mass production industries • Prolonged slump in agriculture • Foreign trade policies: Fordney-McCumber Tariff/Smoot-Hawley Tariff – raised tax on imports but made selling goods overseas difficult

  5. II. Hoover’s Policies • Hawley-Smoot Tariff: increased tax would help farmers but actually made things worse • Believed direct government help would destroy personal initiative • Too much government leads to “state socialism” • Offered more help to banks

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