Chapter 30: The Great Depression

• Chapter 30 - Great Depression
• Chapter 30: Great Depression

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 Chapter 30: The Great Depression

Rubrica: : Know this: Shaky Stock Market Causes Bank Crises, Too Much For Sale Too Little to Spend, Gov. Actions Makes a Bad situation Worse

Shaky Stock Market Causes Bank Crises

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Rubrica: : Bank Runs Resulted from Stock Market Crash. Bank looked like an unsafe place to keep money. Due to bad lending on their part.

Promise of Financial Gain: Speculative and Enthusiasm in Stock market.                                                                                       -Bull Market and Buying on Margin resulted. After Black Tuesday, Bear Market                                            -Bank Runs

Too Much For Sale Too Little to Spend

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Rubrica: : Overproduction and Underconsumption

Industries used the assembly-line method of mass production Overproduction resulted                                                              -Companies overproduced because they could. By 1929, buying spree coming to end                                     -Everyone had bought what they needed or already wanted by then. Underconsumption was a result of debt and lack of necessity in materials                                                                    -Unemployment resulted from underconsumption Underconsumption affected Farmers first                                  -After WW1 Consumptions of Products decreased and prices dropped

Gov. Actions Makes a Bad situation Worse

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Rubrica: : Federal Reserve and Congress blamed for bad actions

Federal Reserves controls nation's money supply                    -One way of doing this is by setting discount rate Before Stock Market, Feds kept rates low to keep money circulating through economy 1931, began raising discount rates                                          -Turned recession into an economic calamity Congress Passed Hawley-Smoot Tariff Act                                 -Triggered a trade war that ended up causing the Great Depression to spread around the globe.