The Great Depression was caused by the financial devastation of World War I, with the US loaning money to allies who did not repay, the failure of the Federal Reserve to control interest rates, and the Smoot-Hawley Tariff Act raising prices of foreign goods and reducing US exports. This led to about 1/3 of the workforce becoming unemployed even as Hoover and later FDR created numerous government programs to stimulate the economy and help the unemployed in the face of the crisis.

1. Great Depression

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