Caption: : 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
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
Caption: : 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.