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03_18 great depression[1]

03_18 great depression[1] - Notes Great Depression What...

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Notes Great Depression What Caused It? 1. Stock Market Crash – “Black Thursday” a. Why would this cause it? a.i. American stock markets crashed a.ii. $26 billion lost b. Why is this not the central cause? b.i. The stock markets didn’t matter all that much; i.e. not a critical component of the system – only 2% of Americans were invested in them b.ii. The stock market is a) a symptom of what is to come and b) underlying economic crisis caused this crash 2. Bank Collapses and Debt Crisis a. In WWI, the US lent money to the Allies (primarily UK/France) b. So UK/France was trying to pay back US and using reparations from Germany c. But Germany was borrowing from US d. This created an endless cycle of debt for the borrowers (particularly the Germans) e. Finally, UK/France stops paying and America suffers a massive bank collapse f. Diagram below: g. Hoover and Roosevelt were both in support of this idea, but took measures against it very differently (size of government) h.
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