1. Causes of the Great Depression

2. The Great Crash Preceded by stock market boom
Black Tuesday (Oct 29, 1929)
- 16 million shares traded
- 1st visible sign of crisis

3. Causes of the Depression
Lack of Diversification in economy = growth depended on few industries

4. Causes of the Depression
Unequal distribution of wealth = workers could not afford products = surplus = layoffs

5. Causes of the Depression
Credit structure of the economy
1. Farmers in debt
2. Too much reliance on credit
3. Banks speculated in stock market

6. Causes of the Depression
Declining exports

7. Causes of the Depression
International debt structure
1. Allies owed US $ (war loans)
2. Borrowed $ from US banks to pay debt
3. Late 1920s, US banks less willing to
loan $ & US tariffs made it difficult to
sell products in US
4. Countries began to default on loans

8. Effects 9,000 banks closed; depositors lost $2.5 billion
Banking Collapse
9,000 banks closed; depositors lost $2.5 billion
Declining $ supply = decline in consumer demand = layoffs
GNP dropped, investment declined, unemployment increased