1. 11:1 Causes of the Great Depression Election of 1928
31st President: Herbert Hoover ( )

2. 11:1 Stock Market Soars “Bull Market” “Margin” “Margin Call”
A long period of rising stock prices
“Margin”
Buying stock with little money down
“Margin Call”
Demand the investor pay back loan immediately

3. 11:1 Causes of the Great Depression “Speculation” (cause #1)
Betting the market will decline or rise
Way to make money quickly
People ‘bet’ the market would continue to rise in 1920’s

4. 11:1 The Stock Market Crash (1929)
Market ran out of new “buyers” (cause #2)
No “new money” to support the Bull Market
Oct 21: “margin call”
Stock Market falls
Oct 24: “Black Thursday” – market falls further
Oct 29: “Black Tuesday”
Mid-November: 30 billion dollars lost

5. 11:1

6. 11:1 Causes of the Great Depression “Bank Run” (cause #3)
Many banks failed after crash
Lent money to speculators
Banks Invested in Stock Market
“Bank Run” (cause #3)
Many depositors decide to withdraw all their money at one time

7. 11:1 Causes of the Great Depression
Uneven distribution of income Manufacturing output rose 32%
Workers wages only rose 8%
Less disposable income to buy goods

8. 11:1 Causes of the Great Depression Loss of Export Sales (Cause #4)
Hawley-Smoot Tariff
Raised tariffs (taxes) on imported goods
Foreign countries do the same
American business unable to sell many goods overseas

9. 11:1 Causes of the Great Depression Mistakes by the Federal Reserve
Failed to raise interest rates on loans (Cause #5)
Would have stopped speculation
Encouraged banks to issue risky loans
Low interest rates made economy look healthy
Raised interest rates too late
No access to loans; tight credit