2. Causes of the Great Depression Ms. Lambly U.S. History II

3. 1928 Presidential Election  Republican Herbert Hoover VS.  Democrat Alfred E. Smith Three P ’ s:  Prosperity  Prohibition  Protestantism

4. Causes of the Great Depression I.The Long Bull Market  Rising stock prices throughout the 20’s  Buying “on margin” - credit  Strong economy

5. CRASH!

8. Causes of the Great Depression In turn, businesses suffered and laid off workers. II. Overproduction Farms and factories overproduced beyond the demand. Wages did not rise as fast as prices. Therefore, people couldn’t afford to buy many goods.

9. “Cycle of Disaster” – many businesses went bankrupt Businesses cut production Workers suffered from wage cuts and lay offs. People had little or no money to spend. Demand for goods fell.

10. Causes of the Great Depression III. Banking and Credit System  Many consumers bought high cost items on the installment plan  Bank Failures  Hawley-Smoot Tariff- raised to highest level in American history  Damaged American sales abroad  Imports cost more $$$

11. * People that bought stocks on margin (credit) could not repay their debts. The Philanthropist The Philanthropist by, Herb Block (Dec. 5, 1930) During the Great Depression approximately 25% of the workforce was unemployed. People who lost their jobs began selling five-cent apples on the streets of American cities, providing a symbol of the economic hardships of the era. * People that had invested their savings in stocks had little or nothing left.

12. A foreclosure sale in Iowa in the early 1930s when "the bottom fell out of everything." Military police were on hand to keep farmers from disrupting the auction. ca. 1935.