Causes of the Great Depression.pptx - The Causes of the...

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The Causes of the Great Depression
The Long Bull Market A strong economy helped Herbert Hoover win the 1928 election, but increasing speculation in the stock market set the stage for a crash. Herbert Hoover, a Republican, and Alfred E. Smith, a Democrat, both ran for president in 1928. Hoover defeated Smith, and promised a bright future for the country. Sometimes the stock market experiences a long period of rising stock prices, or a bull market.
In the late 1920s a prolonged bull market convinced many people to invest in stocks. As the market continued to soar, many investors began buying stocks on margin, making only a small cash down payment. To protect the loan, a broker could issue a margin call, demanding the investor repay the loan at once. Buyers, hoping for a quick windfall, engaged in speculation.
The Great Crash Rising stock prices led to risky investment practices; when the stock market crashed, banks were in trouble.

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