Causes of the Great Depression

1. Unit 2- The Great Depression

2.  1. Industries in trouble- the backbone of the
economy is breaking down
 A. Railroads- losing $- new forms of
transportation
 B. Coal mining- losing $- new forms of energy

3.  C. Housing market- losing $- demand fell, hurts
lumber and furniture industries
 D. Agriculture- losing $- because demand fell

4.  2. Abuse of credit
 A. People are buying more than they can afford
and can’s make payments
 1. Businesses lose $
 2. People stuck in debt
 3. Products can’t be sold

5.  3. Stock Market Crash- start of the Depression
 A. Speculation- Get rich buying stock
 B. Buying on Margin- You pay small % of sotck
price and borrow the rest

6.  C. Black Tuesday- Oct. 29, 1929
 D. People lost much of their wealth and were stuck
in debt

7.  4. Bank Failures- things go from bad to worse
 A. People rush to the bank to get their $
 B. Many banks lost $ in the stock market, their
money is gone

8.  5. Unequal distribution of wealth
 A. No strong middle class to support the
economy
 B. The rich controlled most of the nation’s
wealth

9.  6. Worldwide Depression
 A. Hawley Smoot Tariff- goods coming into US
are super taxed so people will buy American
 B. This creates depression around the world as
the US can’t sell goods abroad

10. I. Life after WWI
 A. Returning
soldiers face
unemployment
 -some take jobs
from women and
immigrants
 B. Cost of Living
doubles