1. Causes of the Great Depression

2. What were economic trends of the 1920’s?
Positives
Negatives
Consumption went up
Farmers suffered as demand and prices fell
Gross National Product went up
Uneven distribution of wealth
Stock Market rose
Overuse of credit
Production and efficiency

3. Election of 1928 Republicans nominated Sec. of Commerce Herbert Hoover
Democrats nominated Alfred E. Smith (NY)
Hoover was elected in a landslide
Americans credit the Republican Party for the economic growth of the 1920’s
Hover promised “A chicken in every pot. A car in every garage.” Vowed to end poverty.

4. Why Did the Stock Market Crash on 10/29/1929?
Stock speculation & buying on margin
Economic growth based on customer confidence
Nervous investors sold off stocks in massive amounts
Normal business cycle
“Black Tuesday”

5. Americans panicked and rushed to pull their $$$ from banks
The Federal Reserve cut interest rates and limited $ supply
Banks did not hold enough $ and were forced to close
Bank deposits were not insured by the government so people lost their $
Business also suffered as many owners turned to cutbacks to save their business  layoffs, reduced payrolls, closing plants

6. How did Depression Grow?
Unemployment grew and incomes shrank
U.S. government passed the Hawley-Smoot Tariff which raised prices on foreign goods to make American made products more competitive
European nations passed protective tariffs of their own on American made products
International trade was virtually destroyed
U.S. was unable to continue loans to Europe to fund WWI reparation debts
European economies collapsed

7. What caused the Great Depression?
Historians and economists disagree on the exact causes of the Great Depression
Economist John Maynard Keynes argued that lack of government regulation helped caused the depression
Also believed that the government should invest more $ in the economy to help fix it
Other economists like Ludwig von Mises and Friedrich con Hayek disagreed with Keynes