7-7: The Great
Depression
Growth had expanded opportunity, but economic
instability led to new efforts to reform U.S. society
and its economic system.
Causes and Effects of the
Depression, 1929-1933
Wall Street Crash
Overspeculation—investments
made with borrowed money
Buying on margin
Overpriced stocks led to
massive selloffs
Stock prices rapidly declined in
October 1929
Causes and Effects of the
Depression, 1929-1933
Causes of the Great Depression
Uneven distribution of income
Stock market speculation
Excessive use of credit
Overproduction of consumer
goods
Weak farm economy
Failure of the Federal Reserve
Dislocations in global trade
Causes and Effects of the
Depression, 1929-1933
Effects
Business failures
Bankruptcies
Run on the banks
Loss on confidence in the market
Reduction in manufacturing
Decline in investment
Workers idle—25% unemployment
Internal migration
Hoover’s Policies
Philosophy
Depression natural occurrence
Recovery dependent on
business community and
private charities
Responding to a Worldwide
Depression
Hawley Smoot Tariff (high)
World trade declined by 40%
Debt moratorium for Germany
Hoover’s Policies
Domestic Programs
Reconstruction Finance Corporation
Federal loans to private businesses
Federal loans to state/local governments
Despair and Protest
Hoovervilles
Migrations
Unrest on the Farms
Dust Bowl
Farm Holiday
Bonus Army
Hoover’s Policies
Election of 1932
Candidates
Hoover—continuation of policies
Roosevelt
New Deal
Repeal of Prohibition
Government aid to unemployed
Bold, persistent experimentation
Results