Beginning of the Great Depression

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Economic signs of a bad future

• In the late 1920s…• Industry wasn’t as strong• Failing Farmers• Rising prices of goods• Credit crash• Uneven distribution of income

Black Tuesday – The Stock Market Crashes

• Problems on previous slide didn’t really crush Americans until… • Black Tuesday• October 29, 1929• Stock Market Crashed• Millions of Americans lost almost to all of their money

• Dow Jones Industrial Average • Is a measurement of the stock market’s health Thermometer of the stock market• It is still used today

Start of the Great Depression

• When the stock market crashed, all the indicators on the first slide (weak industry, failing farmers, rising prices, debt owed from credit, and uneven distribution of wealth) became much, much, MUCH worse! The Great Depression has now begun• Great Depression Period from 1929 to around 1940 in which the economy

of the US (and almost every country in the world) plummeted

What made the Great Depression even worse?

• Run on the Banks• President Hoover’s Laissez-Faire policy• Businesses failing• People losing jobs

Run on the banks

• When the stock market crashed, people made a run on the banks – when people withdraw all their money because of fear the banks would close• Because of this, most banks in America did end of closing, leaving people broke!

President Hoover’s Laissez-Faire Policy

• 1928 – Herbert Hoover elected President (3rd Republican in a row)• Firm believer in Laissez-Faire economics (government

stays out of business) little to no regulation by the government• 1929, Stock Market crashes• Hoover believes the economy will fix itself and leaves it

alone• Instead it gets much worse!• Hawley-Smoot Tariff Act, 1930 was supposed to protect

American farmers and industry from foreign competition, instead did the opposite• Made unemployment even worse!

Businesses fail and people lose jobs• Hoover’s policy of Laissez-Faire = businesses failing and people losing jobs

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