Causes of the Great Depression

Signs of economic trouble

• Uneven wealth – 1% of population controlled 34% of the wealth.

• Living on credit – Installment plan buying.• Overproduction – Companies produced too

many goods.• Farmer’s struggles – Had been living in a

depressed economy since the end of WWI.• Tariff increases – To protect American business

in the 1920s.

Other Causes

• Stock Speculation – Prices not tied to value of the company

• Buying on margin – Borrowing money to pay for stocks.

• Stock Market Crash• Bank Failures – Had invested in the

market or loaned money to others to do so.

• Decreased spending

Some Economic Statistics

• Combined value of the Stock Market decreased by 50%.

• By 1933 – GNP decline by 25%.• By 1932 – 25% of American were unemployed.• In 1933, there were 250,000 real estate

foreclosures.• 2000 banks closed down during the Depression.

How did this impact the lives of Americans?