Part 2 Chapter 17 Depression Summary and Analysis

The Crash leads to the Great Depression. Hoover announces tax cuts and public works programs. Ford lowers car prices and raises wages and the Fed lowers interest rates, all in an effort to boost a sagging economy. All of them ignore the advice of economist John Maynard Keynes about these actions only deepening the Depression. The Morgan partners still do not realize the severity of the effects of the Crash. By early 1930, the stock market has recovered and it appears that the worst effects of the Crash have passed. By April, the market is beginning a downward slide reaching one tenth of its pre-Crash level by summer. The situation is further exacerbated in June with the enactment of the Hawley-Smoot Tariff Act which raises tariffs to their highest levels in U.S. history. The effect of these...