Great Depression

• Who won the presidential election in 1928?


  Herbert Hoover
• What happened to the economy within a year after Hoover's election?


  The economy collapsed, leading to a long depression
• What are the focus points regarding the Wall Street Crash?


  • Speculation's role in the Crash
  • Impact of the Crash on the economy
  • Social consequences of the Crash
  • Roosevelt's victory in the 1932 election
• What is necessary to set up a company?


  Money to pay staff, rent, and buy equipment
• How do investors earn returns on their investments?


  By receiving dividends or selling their shares
• What was the American stock market known as?

  Wall Street
• What happens to share prices when more people are buying than selling?


  The price goes up
• What was the trend of share prices on Wall Street during the 1920s?


  They went steadily upwards
• What is speculation in the context of the stock market?


  Speculation is a form of gambling on stock prices
• How many share owners were there in America by 1929?

  20 million
• What does it mean to buy on the margin?


  To pay only a fraction of the share's value upfront
• What percentage of the Pennsylvania Railroad was owned by women speculators?

  Over 50 percent
• How much money did American banks lend for speculation in 1929?

  $9 billion
• What was a vital ingredient for the rise in share prices?

  Confidence in the market
• What happened when confidence in the stock market decreased?


  More sellers emerged, leading to a crash
• What was the first sign of economic downturn in the construction industry?


  It started its downturn in 1926
• What was one of the main concerns in the US economy before the Crash?


  The unequal distribution of wealth
• How many banks failed in 1929?

  659 banks
• What was the impact of the Wall Street Crash on large speculators?


  They were ruined financially
• How much did the Vanderbilt family lose in the Crash?


  $40 million
• What did President Hoover do to encourage spending after the Crash?


  He cut taxes
• What was the worst failure in American banking history?

  The bankruptcy of the Bank of the United States
• What happened to people's trust in banks after the Crash?


  People stopped trusting banks and withdrew their savings
• What was the effect of the banking crisis on the economy?


  It led to a decrease in loans available for businesses
• What were the economic consequences of the Wall Street Crash?


  • Large speculators were ruined
  • Many went bankrupt due to unpaid loans
  • Immediate downturn in ordering of goods
  • Loss of confidence in the economy
• What factors contributed to the Wall Street Crash?


  1. Poor distribution of income
  2. Over-production by industries
  3. Actions of speculators
  4. Lack of export market
  5. Banks' decision not to support share prices
• What were the weaknesses in the US economy in the late 1920s?


  • Decline in construction and traditional trades
  • High number of bank failures
  • Overproduction of consumer goods
  • Unequal wealth distribution
• What were the events leading up to the Wall Street Crash?


  1. Decline in factory output
  2. Nervousness among speculators
  3. Panic selling of shares
  4. Banks not intervening to support prices
• What was the consequence of banks failing in 1929?


  People stopped trusting banks and withdrew their savings
• How many banks went bankrupt in 1930?

  1352 banks
• Which bank was the biggest to fail in December 1930?

  The Bank of the United States in New York
• How many depositors did the Bank of the United States have?

  400,000 depositors
• What percentage of New Yorkers saved with the Bank of the United States?


  Almost one-third
• What was the impact of the European bank problems in 1931 on the USA?


  It caused panic and further bank withdrawals
• How much money was withdrawn from banks around the country during the panic?

  8 billion dollars
• What did people consider to be the only security during the panic?

  Hard currency
• How many banks went under in 1931?

  2294 banks
• What was the economic behavior of Americans during the downward spiral?


  They kept their money instead of buying goods or shares
• What was the effect of reduced spending on banks and businesses?

  Banks had less money to lend, leading to more bankruptcies
• By how much did industrial and farm production fall between 1928 and 1933?

  40 percent