1. The Stock Market Crashes
Chapter 8

2. The Market Crashes
Investors were gambling on stocks with money they didn’t have
September 3, 1929 – market began to slip
Black Thursday – 10/24 investors started to sell
Black Tuesday – 10/29 bottom fell out
Business Cycles
Great Depression

4. The Banks Collapse Crisis in confidence Misguided monetary policy
People tried to withdraw money from banks
Banks could not survive a sustained “run”
1929 – 641 banks failed
1930 – 1350 banks failed
1931 – 1700 banks failed
Misguided monetary policy
In 1929, the Federal Reserve limited the money supply
Too little money in circulation

5. Businesses Close/ Unemployment Rises
Low stock prices + Reduced spending = TROUBLE
Survival tactics:
Production cutbacks
Layoffs
Plant closures
25% of American workers unemployed by 1933

6. Tariffs Add to the Woes
Hawley-Smoot Tariff – June 1930 raised prices on foreign imports
Couldn’t compete in U.S. Markets
Foreign countries would not buy American

7. Global Depression Reparations and war debts
U.S. could not help
Experienced the same failure and unemployment as the U.S

9. What Caused the Great Depression
Many views on what caused the Depression
Too little money in circulation after crash and bank failures
Lack of government interference