Causes of the Great Depression Over speculation onstocks using borrowedmoney that could not berepaid when the stockmarket crashed in 1929and stock pricescollapsed. This was alsocalled buying stocks “onmargin”.
Causes of the Great Depression Federal Reserve’s failureto prevent widespreadcollapse of the nation’sbanking system in thelate 1920s and early1930s, leading to severecontraction in thenation’s supply of moneyin circulation.
Causes of the Great Depression High protective tariffsthat producedretaliatory tariffs inother countries,strangling worldtrade (Tariff Act of1930, popularlycalled the Hawley-Smoot Act)Congress tried to protectAmerican Business byraising the price ofimported goods– adevastating mistake!
How did thedepressionaffect the livesof Americans?
Impact Unemployment andhomelessness Collapse of financialsystem (bankclosings causedinvestors to lose allthe money theydeposited).This woman was left with herchildren as her husband wentlooking for work. Her look ofuncertainty shows the despairof the times!Photo by Lange; National Archives
Impact Political unrest(growingmilitancy of laborunions) Farm foreclosuresand migration aspeople looked forworkFarmers of the Great Plains alsosuffered from a devastating drought,called the “Dust Bowl”Courtesy: Minnesota Historical Society