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MIAMI UNIVERSITY HISTORY 112 SURVEY OF AMERICAN HISTORY March 3, 2008 ECONOMIC CATASTROPHE One Family’s Story—told about his father’s life. Questions to Consider Why Did the Crash Occur? Why Did the Great Depression Occur? What Was the Impact of the Depression? How Did the Government Respond to the Depression? Overview: Impact of the Depression Massive Unemployment Cities in Crisis Rural Areas in Crisis Consequences of the Depression Why did the Depression Occur? Underlying Problems Disparities in Wealth o Many at the Bottom o Few at the Top—only 2.3 percent of population. Thus purchasing power was in hands of small group of people. Weaknesses in the Banking Structure o Many Independent Banks—so if bank failed there was no way to help people that relied on that bank. Bank failed when depositors wanted to take money out of it. o No Automatic Reactions to a Problem Weaknesses in the Corporate Structure o Too Much Graft and Promotion—a good deal of graft/corruption. o Pattern of Holding Companies—has the assets of two/three/four companies and then have holding companies of the holding companies—so like a pyramid of cards. Thus, if one fails at bottom level the whole structure will fall apart. And what did happen eventually. The Great Crash Stock Market Speculation—stock market began in the 1920s. stock market was on a role during the 20s. peope bought stock on margin—could only pay 10% and then would have to pay 90% later. Problem—if stock started to fall and when you sold it you lost
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This note was uploaded on 03/31/2008 for the course HST 112 taught by Professor Winkler during the Spring '08 term at Miami University.

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