The

Depressio

n

Farming/Agriculture slow-down

Manufacturing slowdown

Natural slow-down’ post ww1

The Feds and money supply

Smoot-Hawley Tariff

Timing/Fear/ Expectations

Stock-Market Crash

Herbert Hoover

The FACTORSUse the remote and click the appropriate rectangle for further information and photos on each of the FACTORS listed. At any time click the “return” rectangle to be redirected to this slide.

For a two slide summary of the depression click the rectangle

How did the end of WW 1 affect agriculture in America?

b. Production stayed high, and demand in Europe stayed high.c. Production lowered and prices stabilized.

a. Production stayed high, but demand and prices dropped.

d. Production stayed high, and demand in America also stayed high.

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According to John Maynard Keynes and John Kenneth Galbraith, both “demand” economists, the depression was due to lack of demand.

What was the argument against “demand-side” economics and the lack of demand?a. No argument, near a consensus favored their reasoning.b. Demand was there; wages remained high., and yet few were purchasing goods.c. Fear and expectations of a recession lowered demand.d. The Federal Bank withheld loans to state and local banks which tightened money and slowed buying.

AllThree..True

To simplify the causes of the depression is not good history but………

Why did the corporations, their factories, cut back in production despite the existence of demand?a. They sensed the tightening of money and

cut back.b. They believed Keynes-there was a lack of

demand so they cut back.c. The bank’s cutting back on loans led to no

new production as well as cut backs.d. They had expected the Stock Market to crash

and horded their money and cut production.

Manufacturing Slowdown

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The Feds and the Money Supply-1

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The Feds and the Money Supply-2

State banks were failing, not the Federal Bank.

The Feds did what to help the state banks?a. Nothing b.

Nothingc. Nothing

d. Nothing

Members withdrew their savings.State banks didn’t have the funds to loan possible investors.The state banks failed.

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The Feds and the Money Supply

Lecture/Discussion: explain the point of the animation.

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Natural slow-down post WW 1

Factories and farms no longer had the demand after the war ended.

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1930 Smoot-Hawley Tariff 1930

Smoot-HawleyTariff

The charts and graphsand

Cartoons

Is the message clear?

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Timing-Expectations-Fear

Before the CRASH (October 29, 1929) what were the thoughts of investors?a. Fear of a crash,

they began to sell.

b. Fear of the results if the Smoot-Hawley Tariff passed; they began to sell.

c. Time to make a profit……buy now.

d. No suspicions, everything seems normal.

How did Europe respond to the tariff on their exports to America?a. Threatened war.b. Do nothingc. Lowered the

price of their exports to America.

d. Instituted their own tariff on US exports.

Explain the cartoon,Hint: note answer “d” to the right.

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Panic selling-few buyers.

Runs on the banks.

An unstoppable slide.

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The problems with farm surplus and low prices, lack of production and demand and bank foreclosures, citizens lost faith in financial institutions and feared the future…………………………………then…………..

Everyone wanted to sell and the value of stocks plummeted.

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The Feds did not stop the runs on

the banks.

Hoover cut taxes on the middle class and the

poor.The effect?a. Some success as

spending by the middle class increased.

b. No effect, nothing changed.

c. A disaster. There was no incentive for the wealthy to invest or expand.

d. The democrats voted to remove the cut.

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With the end of WW IEurope no longer needed US farm goods-demand plummeted but production remained

high.Prices plummeted.

Factories during the Roaring Twenties over produced and demand fell. Unemployment grew. Purchasing fell. Prices fell.Money stopped circulating, loans were recalled, banks were in trouble.What did the Hoover administration do about it?

a. nothing b. Loaned the banks money.

c. Sent in the national guard

d. Regulated all wages and prices.

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• Investors lost their entire fortunes in the stock market

crash. • The wealthy would

not invest nor expand their productions.

• Farm production plummeted as did the prices for their

crops.• The Smoot-Hawley

Tariff had destroyed

international trade.• Without foreign

trade US businesses went

bankrupt.• With the shortage

of money the state banks went bankrupt.

• Unemployment skyrocketed.

• There was no money being

earned, or invested, or saved.• Money had

disappeared.

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Last Slide