The Stock Market Crash of 1929

1
The Stock Market Crash of 1929

• AP US History
• Unit 9

2
What happened in the election of 1928?

• When Americans elected Herbert Hoover President
  in 1928, the mood of the general public was one
  of optimism and confidence in the United States
  economy.
• Most people believed that national prosperity
  would continue indefinitely.

3
What is a Bull Market?

• A "Bull Market"
• During the 1920s, there were rising prices in
  the stock market. 
• During this period, American investors enjoyed an
  enormous "bull market."
• The opposite, a market characterized by falling
  prices, is called a "bear market."

4
Why did people invest in the stock market during
the 1920s?

• Rising stock dividends
• Increase in personal spending
• Relatively easy money policy
• Companies invested their over-production profits
  in new production.
• Lack of stock market regulation.
• Psychology of consumption.

5
What caused the stock market crash to occur?

1. An uneven distribution of money
2. Speculation and margin buying in the stock market
3. Excessive use of credit
4. Overproduction of consumer goods
5. A weak farm economy
6. Restrictive government policies, such as high
   tariffs

6
Hoovers Philosophy

• Believed economic problems beyond US control.
• Key to recovery confidence in economy.
• Blamed for depression b/c of passive attitude
• Hawley-Smoot Tariff 1930 protected domestic
  industries.
• Wanted state local governments to handle
  recovery

7
Poster showing worker receiving his first WPA
check