Major Impacts of the Stock Market Crash and

Great Depression

Review: Causes of Crash• Stock Market

Crash–Overconfidence in

Markets–Speculation–Stock prices are

overvalued–Immediate cause

of the Great Depression

Review: Causes of Depression

• Long Term:–Overproduction of goods (industry and farmers)

–Low profits for major industries–Housing decline–Easy Credit–Unequal distribution of income–Tariff policies lower U.S. exports

Financial Collapse• Bank Failures

–Bank Runs–Loss of Savings

• Stock Market Collapse–$30 billion in investments lost through Nov. 1929.

• Lack of confidence in financial sector prolongs Depression

Increased Tariffs• Goal: protect American

business• Impact: reduced

foreign demand for American goods

• Hawley-Smoot Tariff—highest protective tariff in U.S. history; passed in 1930.

Unemployment• About 90 million

businesses fail.• Unemployment

–3% before Depression

–Reached 25% during the Depression

Poverty• Millions face hunger

and homelessness.

• City—can’t pay rent or mortgage

• Rural—400,000 farms lost to foreclosure.

Family Impacts• Children—

Malnourished, No school

• Broken Families—Kids sent away; men leave home

Health Issues• Mental Health:

–Suicide Rate up 30%

• Physical Health:–Malnutrition

–No dentist/doctor

Lasting Impact on Depression Generation

• Financial Security: #1 goal

• Saving and thriftiness: lasting habit