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The Great Depression (1929-1939). I) The Market Crashes. Oct. 24, 1929 the NYSE had the greatest one day loss in history. A) The unregulated market allowed people & banks to buy on “margin” B) Increasing gap between rich and poor C) High US tariffs discourage international trade
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I) The Market Crashes • Oct. 24, 1929 the NYSE had the greatest one day loss in history. • A) The unregulated market allowed people & banks to buy on “margin” • B) Increasing gap between rich and poor • C) High US tariffs discourage international trade • D) Massive overproduction caused a collapse in prices.
II) Crash leads to Depression • A) Most banks had invested in the stock market with low reserve requirements • B) Collapse of US economy leads to collapse in world economy
III) The Damage is done • A) Unemployment & Poverty skyrocket • B) Deflation drops wages and increases debt. • C) No capital to invest • D) No demand to sustain businesses (The Downward Spiral)
IV) Economics affects Politics • A) Huey Long begins “share the wealth” program • B) Charles Coughlin criticizes Roosevelt for not going far enough. • C) Communist Party membership increases • D) Democracies crumble all over Europe (Germany, Italy, Spain, Portugal)
V) Relief, Reform & Recovery • A) FDIC insures all bank accounts • B) SEC & FTC regulate stock market • C) Social Security helps seniors • D) NLRB created to negotiate between labor and business • E) WWII creates demand for munitions. Pulls us out of Great Depression