2. Causes of the Great Depression
1. Financial Devastation of WWI
– The US loaned money to Allies
– Only Finland repaid the US
3. 2. Failure of the Federal Reserve
• The Federal Reserve doubled the interest rate
4. 3. Smoot-Hawley Tariff Act
• Raised the price of foreign goods
• Foreign countries did the same and the US
exports dropped
5. Results of the Great Depression
1. Unemployment
– About 1/3 of the work force lost their jobs
– Hoover did spend money, but unemployment rate
remained high
6. 2. Growth of government
• Hoover and Franklin D Roosevelt created
numerous government funded programs to
try to get the US out of the depression
Editor's Notes
Loaned $10 billion to allies
Increased debt from 1 billion to about 24 billion in 3 years
When European countries had financial trouble, they simply didn’t pay the US back
Increased rates made it very hard for businesses to borrow money and invest
