Causes of The Great Depression Basics The Great

Causes of The Great Depression

Basics • The Great Depression was a time period lasting from 1929 -1941 • Desperate poverty gripped the nation – Causes: • Republican economic policies – Laissez-faire • • • Unchecked stock speculation Weak and unregulated banking institutions Over production of goods Decline of the farming industry Unequal distribution of wealth

Causes • Prosperity of the 1920’s hides trouble – Agriculture Sector • Over production because of WWI • Demand dropped drastically after the war but they kept producing at high rates • They were not selling enough to pay their expenses • Farmers were barely making enough to get by – Wealth is unevenly distributed – Easy credit hides problems

Stock Market CRASH • The “booming” stock market was based on confidence not reality – Over speculation • People loose confidence – Middle of October people begin pulling and selling their stock • October 29, 1929 “Black Tuesday” • The stock market is wiped out THIS IS THE SPARK THAT IGNITED THE GREAT DEPRESSION

The Great Depression Begins • Banks collapse – People could not withdraw their money • Business close and Unemployment Rises – By 1933 25% of America was unemployed • Tariff wars – America tries protective tariffs again (Hawley. Smoot Tariff) but other countries retaliate • The depression goes global