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Chapter 23. What were some of the causes of the Great Depression? What made it so severe, and why did it last so long? What was the impact of the depression.

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Presentation on theme: "Chapter 23. What were some of the causes of the Great Depression? What made it so severe, and why did it last so long? What was the impact of the depression."— Presentation transcript:

1 Chapter 23

2 What were some of the causes of the Great Depression? What made it so severe, and why did it last so long? What was the impact of the depression on farmers, minorities, and women? How did President Hoover and his administration try to deal with the Depression? What was the results of those efforts? Questions to think About

3 Causes of Great Depression

4 Domestic Reasons Fractional Reserve Lending Easy Credit Buying on Margin Loans for Stock Purchase Bank Runs Over- Production Reduced Consumer Spending

5 Overseas Reasons BANK of England High American Tariffs WWI Reparations Inflation Internation al Debt

6 International Monetary Policy During WWI Countries go off the Gold Standard They were trying to protect their gold British Central Bank looks to keep their dominance over world Financial markets through the League of Nations

7 After WWI No Gold Standard Why? Before WWI 1 Pound = $4.86 After 1 Pound = $3.50 If return to Gold Standard 30% Loss

8 Britains Problem British Manufacturers Could not cut wages because of Unions creating less Profits All Countries Inflate Currencies to keep prices competitive Gold Prices Rise

9 Britains Scheme Keep Pounds at Inflated Level Want to save Exports British Manufacturers Could not cut wages because of Unions so they need low prices High Tariffs

10 The Collapse Loans Germany redeems Pounds for Gold to pay loans

11 The Collapse Germany redeems Pounds for Gold to pay loans With Less Reserves US Banks begin to Collapse Margin Calls

12 The Crash Black Tuesday October 29 th 1929 Panic $40 Billion lost Banks close Unemployment goes to 20% Farms close

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16 President Hoovers Solution Voluntarism No cuts to hours or wages Agricultural Marketing Act Parity Reconstructi on Finance Corporation Loan Program Hoovervilles Public Works Smoot- Hawley Tariff

17 Bonus Army ,000 vets go to DC to demand payment Hoover sends army to evacuate Vets Riot ensues Makes Hoover Look Bad Hoover is blamed for Depression

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