The Great Depression

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The Great Depression
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Causes of the Great Depression
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1. Consumer Society Optimism of the times
? Easy credit, advertising
Advertising Installment Plans - 23 cents a day
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2. International relations
? U.S. demanded payment of WWI loans ? Wouldnt
pay debts or buy American
1. Loans to Allies During WWI 7 billion dollars
2. Loans to Help Allies Rebuild 3 billion
dollars
3. Germany to pay large reparations to the U.S.
Other nations used German reparations to
repay their loans to U.S.
Destruction in Abbeville, France at end of WWI
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3. Coolidges ineffective leadership

• supported Laissez-faire
• (govt should stay out of economics)
• ? ignored signs of false prosperity

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4. Differences in Income

• 42 below poverty level, 1 had
• 30 of wealth

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5. Overproduction

• Farmers expanded after WWI
• Mechanization produced more goods
• Not enough buyers

WWI propaganda to encourage farmers
1921 Tractor
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6. Inflated Stock Market

• Speculation (get rich quick)
• Buying on margin (borrowing)

1928 Busy Trading Day in New York
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Stock Market Crash Oct. 29, 1929

• ? Panicked selling caused prices to lower
• Black Tuesday 16 million shares sold,
• 15 billion dollar loss