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The Stock Market Crashes
Chapter 8
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The Market Crashes Investors were gambling on stocks with money they didn’t have September 3, 1929 – market began to slip Black Thursday – 10/24 investors started to sell Black Tuesday – 10/29 bottom fell out Business Cycles Great Depression
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The Banks Collapse Crisis in confidence Misguided monetary policy
People tried to withdraw money from banks Banks could not survive a sustained “run” 1929 – 641 banks failed 1930 – 1350 banks failed 1931 – 1700 banks failed Misguided monetary policy In 1929, the Federal Reserve limited the money supply Too little money in circulation
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Businesses Close/ Unemployment Rises
Low stock prices + Reduced spending = TROUBLE Survival tactics: Production cutbacks Layoffs Plant closures 25% of American workers unemployed by 1933
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Tariffs Add to the Woes Hawley-Smoot Tariff – June 1930 raised prices on foreign imports Couldn’t compete in U.S. Markets Foreign countries would not buy American
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Global Depression Reparations and war debts
U.S. could not help Experienced the same failure and unemployment as the U.S
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What Caused the Great Depression
Many views on what caused the Depression Too little money in circulation after crash and bank failures Lack of government interference
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