Causes of the Great Depression

Industries/Overproduction Factories were producing too much Supply was higher than demand Prices drop Cut hours, wages, and job Businesses close

Banking/Credit Banks were loaning out lots of money Using loans to buy goods Lose job and can’t pay back loans Banks lose money and shut down

Raise Tariffs – tax on imported goods Makes US goods cheaper World Trade Raise Tariffs – tax on imported goods Makes US goods cheaper Encouraging buying Other countries no longer trade

Stock Market Everyone is playing to “get rich quick” Buying on margin Only actually buy part of stock and borrow rest Stock prices drop so people can’t pay back their loan on the stock Crashes Oct 1929 Everyone sells stocks and no one buys “Start of Great Depression”