1. Chapter 23
The Great Depression

2. Questions to think About
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?

3. Causes of Great Depression

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

5. Inflation BANK of England Overseas Reasons WWI Reparations
International Debt
High American Tariffs
Inflation

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

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

8. All Countries Inflate Currencies to keep prices competitive
Britain’s 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. Keep Pounds at Inflated Level
Britain’s Scheme
Want to save Exports
Keep Pounds at Inflated Level
High Tariffs
British Manufacturers Could not cut wages because of Unions so they need low prices

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

11. Germany redeems Pounds for Gold to pay loans
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 29th 1929 Panic $40 Billion lost
Banks close
Unemployment goes to 20%
Farms close

16. Public Works President Hoover’s Solution
Smoot-Hawley Tariff
President Hoover’s Solution
Reconstruction Finance Corporation
“Loan Program”
Voluntarism
“No cuts to hours or wages”
Agricultural Marketing Act
“Parity”
Public Works
“Hoovervilles”

17. Bonus Army 1932 20,000 vets go to DC to demand payment
Hoover sends army to evacuate Vets
Riot ensues
Makes Hoover Look Bad
Hoover is blamed for Depression