1. The Great Depression starts with a crash of S.T.O.C.K.S.

2. S.  Initial collapse was “Black Thursday”: October 24, 1929  Stocks continued to collapse on “Black Monday” and “Black Tuesday” the following week. Stock Market Crash (1929) Fast Fact: A month before “Black Thursday” the average price of thirty leading industrial shares was $380. When trading ended on Oct. 24, it was $230.

3. T.  Hawley-Smoot raised tariffs on imported goods  Other countries immediately raised their tariffs in retaliation  The depression deepened and lengthened as a result Tariffs raised (Hawley- Smoot Act) Fast Fact: 1,028 economists implored President Hoover to veto the tariff bill. They were ignored.

4. O.  Many people bought stocks on a “margin,” meaning they did not pay face value  Often stocks were bought for as little as 10% of actual value and later resold after a “bubble” was created Overspeculation of stocks Fast Fact: In 1929, the unemployment rate was 3%. It would rise to 24% by 1932.

5. C.  Banks provided easy credit during the 1920s  Loans were often used to buy stocks on the “margin”  Banks failed when loans were not repaid Collapse of banking system Fast Fact: Over 4,000 banks failed in 1932 alone.

6. K.  Federal Reserve failed to respond effectively to bank failures  It restricted the money supply (rather than allowing banks access to more) which ultimately led to more bank failures Key failure of Federal Reserve

7. S.  With bank failures came panic  Run on the banks became common as people rushed to withdraw their savings  Millions lost their savings Savings lost