1. The Causes of the Great Depression
Chapter 11.1
The Causes of the Great Depression

2. The Long Bull Market The Election of 1928 The Stock Market Soars
Hoover vs. a Catholic!!!!
“I have no fears for the future…”
The Stock Market Soars
Bull Market
And if I don’t have the money
Margin! How can that go wrong?
Speculation

3. The Great Crash The Stock Market Crash Banks Begin to Close
The people stopped buying
A story about tulips
October 29th, 1929
Black Tuesday
Losses on an unimaginable scale
One years earnings
Banks Begin to Close
Banks gave the “margin” & invested as well
Banks cut back on loans
Bank runs
10% of banks close by 1932

4. The Roots of the Great Depression
The Uneven Distribution of Income
Too much stuff being made
Output increased faster than wages
Installment plan issues
And when people stop buying
The Loss of Export Sales
WWI drained foreign countries of money
They’re not buying our stuff
“Buy American!”
Hawley-Smoot Tariff

5. Cont Mistakes by the Federal Reserve Interest rates change behaviors
More willing to make loans, more willing to take loans
Low rates when they should be high
Raised rates when they should be low