Causes%20of%20the%20Great%20Depression

1
Causes of the Great Depression

• Chapter 22, section 1

2
The Election of 1928

• President Calvin Coolidge decided not to run
  again for President in 1928
• Major issue for the 28 Election was Prohibition

3
The Election of 1928

• Republicans nominated Herbert Hoover
• Hoover was a successful engineer and head of the
  Food Administration in WWI
• Was dry

4
The Election of 1928

• Hoover had advantage as a Rep.
• The 1920s were very prosperous and the Rep. Party
  took credit
• Republicans promised to continue the trend

5
The Election of 1928

• Democrats nominated Alfred Smith
• Former governor of New York
• 1st Catholic ever nominated to run for president
• Was wet

6
The Election of 1928

• Smear campaign created against Smith
• Religious differences played a major role in the
  campaign
• Many Protestants feared a Catholic President

7
The Election of 1928

• Hoover receives over 6 million more votes
• Wins 444-87

8
The Election of 1928

• We are nearer to the final triumph over poverty
  than ever before in the history of any land.

9
The Stock Market

• In the late 1920s, many Americans began to invest
  heavily in the stock market
• As the market grew, investors bought stocks on
  margin then sold them when prices went up to make
  profits
• Problems came when prices fell, brokers would
  issue margin calls

10
The Stock Market

• Many investors engaged in speculation and bet on
  the market climbing

11
Black Tuesday

• By late 1929, a lack of new investors in the
  stock market caused stock prices to drop
• Stockbrokers began to issue margin calls
• Customers placed their stocks on sale

12
Black Tuesday

• October 29,1929dubbed Black Tuesday
• Deepest dive
• 15 billion lost in value
• Market continued to drop

13
Black Tuesday
14
Bank Failures

• Market crash weakened nations banks
• Banks loaned money to speculators and had put
  money on the market
• Some banks lost so much money they closed
• Bank runs forced others to close

15
Bank Failures

• 3,000 banks failed in first 2 years of the
  Depression
• Americans lost faith in banks

16
Causes of the Great Depression

• Stock market crash triggered the Depression, but
  was caused by underlying factors

17
Causes of the Great Depression

• 1. Overproduction

18
Causes of the Great Depression

• 2. Uneven distribution of income
• In 1929, the top 5 of the population earned 30
  of the countrys income

19
Causes of the Great Depression

• 3. Low consumption
• Wages did not increase fast enough, sales
  decreased, which led to layoffs

20
Causes of the Great Depression

• 4. Installment plans

21
Causes of the Great Depression

• 5. The Hawley-Smoot Tariff
• Passed in 1930
• Raised tax on imports
• Highest tariff rate in history
• Damaged American sales overseas