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.

Most people believed that national prosperity would continue indefinitely.

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."

Why did people invest in the stock market during the 1920s?

1. Rising stock dividends

2. Increase in personal spending

3. Relatively easy money policy

4. Companies invested their over-production profits in new production.

5. Lack of stock market regulation.

6. Psychology of consumption.

What caused the stock market crash to occur?

1. An uneven distribution of money2. Speculation and margin buying in the

stock market3. Excessive use of credit4. Overproduction of consumer goods5. A weak farm economy6. Restrictive government policies, such as

high tariffs

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

Poster showing worker receiving his first WPA

check

Harry Sternberg, Builders (1935-36)