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The Stock Market Crash of 1929

The Stock Market Crash of 1929. AP US History Unit 9. What happened in the election of 1928?. When Americans elected Herbert Hoover President in 1928, the mood of the general public was one of optimism and confidence in the United States economy.

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The Stock Market Crash of 1929

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  1. The Stock Market Crash of 1929 AP US History Unit 9

  2. What happened in the election of 1928? • When Americans elected Herbert Hoover President in 1928, the mood of the general public was one of optimism and confidence in the United States economy. • Most people believed that national prosperity would continue indefinitely.

  3. What is a “Bull Market?” • A "Bull Market" • During the 1920s, there were rising prices in the stock market.  • During this period, American investors enjoyed an enormous "bull market." • The opposite, a market characterized by falling prices, is called a "bear market."

  4. Why did people invest in the stock market during the 1920s? • Rising stock dividends • Increase in personal spending • Relatively easy money policy • Companies invested their over-production profits in new production. • Lack of stock market regulation. • Psychology of consumption.

  5. What caused the stock market crash to occur? • An uneven distribution of money • Speculation and margin buying in the stock market • Excessive use of credit • Overproduction of consumer goods • A weak farm economy • Restrictive government policies, such as high tariffs

  6. Hoover’s Philosophy • Believed economic problems beyond US control. • Key to recovery = confidence in economy. • Blamed for depression b/c of passive attitude • Hawley-Smoot Tariff: 1930 protected domestic industries. • Wanted state & local governments to handle recovery

  7. Harry Sternberg, Builders (1935-36) Poster showing worker receiving his first WPA check

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