causes of the great depression ms. lambly u.s. history ii
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Causes of the Great Depression
Ms. LamblyU.S. History II
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1928 Presidential Election Republican Herbert Hoover
VS.Democrat Alfred E. Smith
Three P’s:
Prosperity
Prohibition
Protestantism
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Causes of the Great Depression
I. The Long Bull Market Rising stock prices
throughout the 20’s Buying “on margin” -
credit Strong economy
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CRASH!
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Causes of the Great Depression
• In turn, businesses suffered and laid off workers.
II. Overproduction
• Farms and factories overproduced beyond the demand.• Wages did not rise as fast as prices.• Therefore, people couldn’t afford to buy many goods.
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“Cycle of Disaster” – many businesses went bankrupt
Businesses cut production
Workers sufferedfrom wage cutsand lay offs.
People had little or no money to spend.
Demand forgoods fell.
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Causes of the Great Depression
III. Banking and Credit System Many consumers bought high cost items on the installment plan
Bank Failures
Hawley-Smoot Tariff- raised to highest level in American history
Damaged American sales abroad
Imports cost more $$$
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* People that bought stocks on margin (credit) could not repay their debts.
The Philanthropist by, Herb Block (Dec. 5, 1930)
During the Great Depression approximately 25% of the workforce was unemployed. People who lost their jobs began selling five-cent apples on the streets of American cities, providing a symbol of the economic hardships of the era.
* People that had invested their savings in stocks had little or nothing left.
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A foreclosure sale in Iowa in the early 1930s when "the bottom fell out of everything." Military police were on hand to keep farmers from disrupting the auction. ca. 1935.