1. Causes of the Great Depression

2. Overproduction and Under consumption
The US was producing too much
Not enough money to buy it all
Some was purchased on credit- not good
Still not enough of the products being produced were being bought- inventories of unpurchased goods sat in warehouses, so companies began producing less, and laying off workers- so unemployment rose

3. High Tariffs
These were good for American business, but restricted international trade
Tariff retaliation
When we raised our tariffs other countries raised their on American good in retaliation, making it hard to sell goods in foreign markets

4. Speculation, Shaky Banking and Inflated Stocks
Speculation and buying on margin
Stocks and real estate
A “bull” market vs. a “bear” market
Biggest issue came in borrowing more then you could ever hope to pay off- banks allowed it, and people would make money but very dangerous. Casued inflation of stock prices bc more people were buying stocks then could actually afford them

5. Black Tuesday- Oct. 29, 1929 Chain reaction- Businesses Banks
Stock Market Crash
Black Tuesday- Oct. 29, 1929
Chain reaction-
Businesses
Banks
Stock market halted and then crashed- people got scared and started selling off their stocks- flooding the market with a product forces the price way down. = stack market crash
In 3 weeks stocks lost half their value and 30 billion dollars was lost
Chain reaction- businesses could no longer raise money through selling stock 26,000 businesses failed in 1930
banks- people who lost money in the crash could not pay back their loans so banks failed- many people lost their lifes savings

6. Crash Becomes Worldwide
Investing overseas
American investors had invested in foreign markets, to try and rebuild the European economy, now they called in their funds from Europe crushins the European economy and spreading the depression to Europe
Germany defaulted on its reparation payments which meant the allies weren’t able to make payments on their loans. Depression worst in germeny

7. No safety net Shantytowns Farmers and food Human Experience
Safety net- federal programs to help those who have fallen on hard times, unemployment relief, retirement benefits or bank deposit insurance
Shantytowns- one day you were working the next you had lost everything and you were on the street, created shantytowns of homeless people. Many depended on the soup kitchens and bread lines provided by local charities
Farmers were unable to sell enough of their source to make a profit and went bankrupt= no more growing food= food shortage, but no one can afford it.