1. Black Tuesday Stock Market Crash October 29, 1929 Result not Cause
Signals the start of the Great Depression
*Only WWII gets America out of the Great Depression, not New Deal

2. Causes of the Great Depression
1. Disparity of Incomes
2. Buying on Credit
3. Farm Economy Collapse
4. laissez-faire policy and the end of Progressivism
5. Taxes
6. Stock Market Speculation
7. Federal Reserve

3. 1. Disparity of income
Roaring 20’s: good times; high employment and no inflation
Gap between rich and poor was very large
Majority of workers lived below poverty line ($2500 in 1929)

4. 2. Buying on Credit
At some point creditors will stop giving people credit
Drop in consumer spending = lay-offs
Layoffs = less spending, which then = more lay-offs

5. 3. Farm Economy farmers produce too much, farm prices fall
farmers produce more to keep up, prices fall even more
farmers cannot pay their loans, default, defaulting puts banks out of business

6. 4. laissez-faire policy and the End of Progressivism
Big Business allowed to do whatever they want - laissez-faire
tariff raised on foreign goods to help protect US industry
child labor and minimum wage overturned

7. 5. Taxes taxes on the wealthy are slashed
Wealthy spend money on luxury items, not items produced by the common factory worker

8. 6. Stock Market Speculation
“get rich quick”
buy on margin - investor allowed to borrow the money to buy stocks now
People had to sell, which drove the price down even further

9. 7. Federal Reserve
charged low interest and businesses would borrow - goes to workers who buy products
charge high interest people don’t borrow - discouraged lending

10. Government to the aid
1. because of influence of Big Business the Government issues a tariff - which made goods high
other Countries can’t sell their goods in America and therefore cannot buy American
Also impose their own tariff on American goods
2. President Hoover urges companies to voluntarily maintain wages and hours - companies do the opposite
3. Advocates “rugged individualism”

11. Impact on the People 25% Unemployment
People lost their homes - took to the streets
People that still had jobs had their hours and wages cut
People only bought necessities - further led to lay- offs
“Runs” on banks
people fear losing money and take all their money out of banks

13. CROWD OUTSIDE A CLOSED BANK

14. RUN ON BANK

25. Postwar Europe World War I was extremely costly.
Death ~ 8,000,000; Wounded ~ million
Money ~ 338 billion
The Great War left every major European country nearly bankrupt.
Europe’s domination in world affairs also declined.

26. Postwar World Economy
Late 1920s – Europe was rebuilding its war-torn countries
WWI left many countries bankrupt
US helped by giving out loans

27. What’s up with Germany? Became a democracy- Weimar Republic
Lacked democratic tradition
Many political parties
Germans blamed the Weimar government for the loss in WW1

28. What’s up with Germany? Still humiliated and bitter
Didn’t pay for war by raising taxes – just printed more money
To pay back reparations to Allies – printed more money
Money lost value
Loaf of bread in 1918 = less than a mark
In 1923 = 200,000,000,000 marks
America loans Germany $200 million

30. Inflation gone mad! It’s hyperinflation

31. Effects Global depression
Americans demand to have their loans paid back – ASAP!
World trade stopped- Import taxes
Every country hurt
Franklin Delano Roosevelt – New Deal
Creates jobs for the unemployed