Causes of the stock market crash
- Overproduction of goods
- Over Speculation during the 1920
- “buying on margin”
- uneven distribution of wealth
- too much borrowing from banks
- stock prices were grossly inflated, did not have real value
- Federal Reserve increased interest rates
- lack of government regulation
Effects of the Stock Market crash
- Investors and businesses lose millions of $$$
- thousands of banks fail-saving are wiped out
- Businesses cut production-lay off workers
- Great Depression starts
- Depression spreads to Europe and other parts of the the worlds
- unemployment rises- people quit spending money
- Deficit spending starts
- New Deal programs start-makes the US government much larger
- the New Deal creates many organizations that are still around today-social security
- Fascist, military and communist dictators come to power throughout the world
The Vicious Cycle of the Great Depression
- Companies lose $$ so they lay people of
- unemployment rate goes up and less people buy goods as income has dropped
- Companies profits fall so they have to lay more people off or close
- Cycle repeats itself
McNary-Haugen Bill
- in early 1924, Senator Charles L. McNary of Oregon and Representative Gilbert N Haugen of of Iowa introduced a bill calling for the following:
- “A federal farm board was to be created to purchase surplus farm production at pre-World War 1 prices; the surpluses were to be stored until domestic conditions improved or until a decision was made to offer them on world markets.”
Hoover’s Ironic Speech
- “We in America today are nearer to the final triumph over poverty than ever before in the history of the land..We shall soon with the help of God be in sight of the day when poverty will be banished from this land.”
- Herbert Hoover in his acceptance speech June, 1928
Dow Jones
- The Dow Jones Industrial Average (DJIA) is one of several stock market indicators created by Charles Dow.
- Dow compiled the index as a way to gauge the performance of America’s stock market.
- Today, the average consists of 30 of the largest and most widely held public companies in the US.
Black Tuesday- DAY BEFORE STOCK MARKET CRASH!
Boulder (Hoover) Dam
- Boulder Dam (renamed Hoover Dam after President Hoover), located 34 miles from Las Vegas, is one of the engineering marvels of the world
- Hoover Dam is 726 feet high and 660 feet thick at its base.
Franklin D Roosevelt’s plan: Relief, Reform and Recovery
- Relief for the needy
- Economic recovery
- Financial reform
FDR’s Brain Trust
- Harry Hopkins
- Henry Morgenthau
- Louis Lowe
- Cordell Hull
- Frances Perkins
- Sam Rosenman
- Rexford Tugwell
- Raymond Moley
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