7-7: The Great

Depression

Growth had expanded opportunity, but economic

instability led to new efforts to reform U.S. society

and its economic system.

Causes and Effects of the

Depression, 1929-1933

Wall Street Crash

Overspeculation—investments

made with borrowed money

Buying on margin

Overpriced stocks led to

massive selloffs

Stock prices rapidly declined in

October 1929

Causes and Effects of the

Depression, 1929-1933

Causes of the Great Depression

Uneven distribution of income

Stock market speculation

Excessive use of credit

Overproduction of consumer

goods

Weak farm economy

Failure of the Federal Reserve

Dislocations in global trade

Causes and Effects of the

Depression, 1929-1933

Effects

Business failures

Bankruptcies

Run on the banks

Loss on confidence in the market

Reduction in manufacturing

Decline in investment

Workers idle—25% unemployment

Internal migration

Hoover’s Policies

Philosophy

Depression natural occurrence

Recovery dependent on

business community and

private charities

Responding to a Worldwide

Depression

Hawley Smoot Tariff (high)

World trade declined by 40%

Debt moratorium for Germany

Hoover’s Policies

Domestic Programs

Reconstruction Finance Corporation

Federal loans to private businesses

Federal loans to state/local governments

Despair and Protest

Hoovervilles

Migrations

Unrest on the Farms

Dust Bowl

Farm Holiday

Bonus Army

Hoover’s Policies

Election of 1932

Candidates

Hoover—continuation of policies

Roosevelt

New Deal

Repeal of Prohibition

Government aid to unemployed

Bold, persistent experimentation

Results