Stock Market Crash and the Great Depression

The “not so roaring” 20s:

Factory workers continued to

struggle from low wages

Many Americans reached

their limits on installment

plans and got into debt

(2)The “not so roaring” 20s:

Farmers prospered briefly

during WWI because of higher

demand

Low crop prices returned after

the war ended

Haves:

Factory workers

Farmers

Sharecroppers

Labor union members

Have Nots

Andrew Carnegie

Big Business Owners

John D. Rockefeller

S.O.L.

Causes of the Great Depression

Speculation: People were allowed to buy stock “on

margin, which means with money they

did not actually have

Speculation led to “Black Tuesday” on

October 29, 1929, when the stock

market “crashed”

The Stock Market Crash DID NOT cause

the Great Depression

But it was a powerful

example of the economic

problems in the 1920s

S.O.L.

Overproduction:Farmers continued to harvest crops at

World War I levels even after the war ended

which caused overproduction

Overproduction made low crop prices return

and farmers couldn’t pay off their debts

Unpaid debts led to bank failures

S.O.L. - Laissez faire

Republican presidents in the 1920s moved back to not putting strict

rules on businesses

Problems from the Gilded Age returned in the 1920s:

- Increased power of big business

- Increased tariffs

- Decreased taxes on the wealthy

- Child labor laws declared unconstitutional

Who benefited from laissez faire?

Yes

Big Businessmen

Factory owners/Management

No

Factory workers

Farmers

Who gets blamed for the Great Depression?

President Herbert Hoover

was in office between

1929-1933

What should actually be blamed?

The Federal Reserve serves as the main banking system for the US

Americans looked to the Federal Reserve help during the Great Depression

The Federal Reserve made things worse:

↑

Increased

interest rates 

↓

Decreased the

money supply

What the Federal Reserve SHOULD have done:

The Exact Opposite

↓

Decrease interest

rates

↑

Increase the

money supply