Week 4 Forum HIST102

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American Military University *

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HIST102

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History

Date

Apr 3, 2024

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docx

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Week 4 Forum HIST102 1. What were the domestic and foreign causes of the Great Depression? How did President Hoover respond to the economic emergency? Hello Class, There were many domestic and foreign causes for the Great Depression like the stock market crash of 1929, overproduction, global economic stability, Smoot-Hawley Tariff Act and bank failures to name a few. The Stock Market Crash of 1929 started the Great Depression as billions of dollars were lost. The Crash also known as Black Tuesday occurred on 29 October 1929 where investors traded 16 million shares on the New York Stock Exchange in one day as panic set in as stock prices had been declining since September due to declining production and rising unemployment that left stocks more than their actual value. Industries were also producing more than consumers could afford to purchase causing a large surplus in supplies leading to layoffs, reduction of production and economic decline. Banks in America had heavily invested in the stock market and when the market crashed many Americans saw their saving disappeared as the banks were forced to close because they could not meet their financial obligations. The Global economic failures started after World War I as the reparation imposed on Germany through the Treaty of Versailles heavily affected global economic stability. To pay its obligation Germany began printing too much currency in 1919 the German Mark to American dollar rate went from 32.9 to 1 to 433 billion to 1 by 1924. As the United States had great economic ties with Europe the decline of the German Mark made waves internationally affecting the world economy. The Smoot-Hawley Act which placed high tariffs on goods made it difficult for Europeans to sell in the United States and pay their bills. President Hoovers response to the economic emergency was cautious and reactive as he believed that the economy would recover on its own. He wanted to limit government involvement and hoped businesses would work together to prevent further decline. Nothing was working though and in 1932 Hoover signed the Reconstruction Finance Corporation that was to support key sectors of the economy and help with the economic recovery. A&E Television Networks. (n.d.-a). How economic turmoil after WWI led to the Great Depression . History.com. https://www.history.com/news/world-war-i-cause-great- depression A&E Television Networks. (n.d.-b). Stock market crash: 1929 & black Tuesday . History.com. https://www.history.com/topics/great-depression/1929-stock-market-crash

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