Causes of the Great Depression. Signs of economic trouble Uneven wealth – 1% of population controlled 34% of the wealth. Living on credit – Installment.

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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 banks closed down during the Depression. How did this impact the lives of Americans?