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    The Great Depression was caused by a series of economic factors in the late 1920s and early 1930s. These included a farm depression as crop prices fell sharply, overproduction in industry, rampant speculation in the stock market, the stock market crash of 1929, and widespread bank failures across the US. As a result, unemployment rose to 25-35% of the total labor force and farm incomes declined by 60%, leading one-third of farmers to lose their land. International trade also collapsed as countries retaliated with high tariffs and Germany could no longer pay its debts from World War I. The Smoot-Hawley Tariff Act of 1930 exacerbated international trade tensions.

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    The Great Depression was caused by a series of economic factors in the late 1920s and early 1930s. These included a farm depression as crop prices fell sharply, overproduction in industry, rampant speculation in the stock market, the stock market crash of 1929, and widespread bank failures across the US. As a result, unemployment rose to 25-35% of the total labor force and farm incomes declined by 60%, leading one-third of farmers to lose their land. International trade also collapsed as countries retaliated with high tariffs and Germany could no longer pay its debts from World War I. The Smoot-Hawley Tariff Act of 1930 exacerbated international trade tensions.

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    11 views15 pages

    Section Euro Great Depression

    Uploaded by

    kevin
    The Great Depression was caused by a series of economic factors in the late 1920s and early 1930s. These included a farm depression as crop prices fell sharply, overproduction in industry, rampant speculation in the stock market, the stock market crash of 1929, and widespread bank failures across the US. As a result, unemployment rose to 25-35% of the total labor force and farm incomes declined by 60%, leading one-third of farmers to lose their land. International trade also collapsed as countries retaliated with high tariffs and Germany could no longer pay its debts from World War I. The Smoot-Hawley Tariff Act of 1930 exacerbated international trade tensions.

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    © All Rights Reserved
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    of 15

    The Great Depression

    Causes and Effects

    Causes
    1. Farm Depression
    2. Overproduction in Industry
    3. Speculation
    4. Stock Market Crash
    5. Bank Failures
    6. Unemployment
    7. Trade Collapse
    8. American Economic Policy

    Farm Depression

    Prices of products
    fallen suddenly

    Farmers produced more a


    lot

    They lost a lot of money

    Overproduction in Industry

    Speculation

    Broker loans on call rose


    from $3.5b in 1927 to $8.5b in
    1929

    Only 1.5M of 120M


    population were investors

    Stock Market Crash

    Sep. 3 Dow high of 381

    Oct. 23 - J.P. Morgan buys to


    stop price decline

    Oct. 24 - panic selling began


    - 12.8m shares

    Oct. 29 - "Black Tuesday" 16.4m shares

    Two Months after the crashstockholders lost more than


    $40 billion dollars.

    Bank Failures

    9000 banks fail in


    1930

    Unemployment

    Ripple effect as leading


    factories close

    Rose to 25-35% of total


    labor force

    Farm income declined


    60%

    1/3 lost their land

    Trade Collapse

    Foreign countries retaliate with high tariffs

    Weimar Republic unable to pay reparations or


    U.S. banks loans

    U.S. had been a creditor with $638m annual


    surplus

    American Economic Policy

    Smoot-Hawley Tariff: 1930

    Willis C. Hawley and Reed Smoot in April 1929, shortly before the
    Smoot-Hawley Tariff Act

    Consequences

    Mesures taken to
    stop the crisis

    protectionist barriers => decrease imports


    production limited => slow down the price drop
    protection of the small shops
    deflationary politics to reduce budget deficit

    Hoover
    1929
    reduction in taxes
    create employment with public works
    500 million dollards tu help farmers
    1930
    Hawley Smoot Tariff: taxes on foreign goods

    1931
    Reconstruction Finance Corporation: helps finance companies and banks
    300 million dollards for clothes food and shelters

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