business failures, unemployment, stock market crash, Black Tuesday, Dow Jones index, uneven distribution of income, buying on margin, excessive use of credit, overproduction, high tariffs, federal reserve, bank failures, gross national product, poverty and homelessness, Herbert Hoover, self reliance, Hawley-Smoot Tariff, debt moratorium, Farm Board, Reconstruction Finance Corporation, bonus march
the Great Depression
longer lasting than any other previous panic or depression, more business failures and unemployment, more people were affected
causes of the 1929 crash
stock market crash - stock prices were rising and suddenly collapsed
Black Thursday - unprecedented amount of selling, stock prices plunged, temporarily stabilized by bankers buying millions of dollars of stocks
Black Tuesday - millions of investors tried to sell, no buyers, Dow Jones index falls
underlying causes of the Great Depression
uneven distribution of income
stock market speculation/buying on margin
excessive use of credit - increased borrowing and installment buying
overproduction of products that workers with stagnant wages could not afford
weak farm economy
government policies - high tariffs, Federal reserve kept tight money policies, bank failures cased people to panic and withdraw money
worldwide depression, U.S. insistence on loan repayment
effects of the Great Depression
poverty and homelessness increased
U.S. gross national product (value of all goods and service by the nation in one year) dropped significantly
nation’s income declined by over 50%
~20% of all banks closed, 10 million savings accounts were wiped
money supply contracted by 30%
25% (13 million people) of the workforce were unemployed
President Herbert Hoover’s policies
self reliance - the belief in the natural return of prosperity through lack of legislative action, not cutting wages, not striking, and private charity efforts
Hawley-Smoot Tariff - high tariffs, tax increases on foreign imports, international trade declines → further economic depression
debt moratorium - suspension on payment of international debts, massive loan defaults, depositors withdraw money
Federal Farm Board - too modest to help with overproduction, unable to stabilize farmers’ prices
Reconstruction Finance Corporation - created to assist faltering financial institutions by stabilizing key businesses with emergency loans, trickle down
despair and protest
farmers banded together to stop banks from foreclosing on farms and evicting people
Farm Holiday Association - tried to stop prices dropping by stopping all grain crop from reaching the market
bonus march (1932) - unemployed war veterans marched to D.C. and demanded their promised bonus payments, driven away by tanks and tear gas