1. The Roaring Twenties come to an End with a Crash!
The American Dream collapses with the beginning of the Great Depression

2. Factors that Led to the economic collapse of 1929 and inevitably the Great Depression
Expansion of Credit-too much installment buying, not enough money in circulation
Financial speculation -buying on margin in the stock market
Mismatch between production and consumption-overproduction in the agriculture and industry
Agricultural crop failures leading to high tariffs and prevention of free trade among nations
Weakness in banking system
Laissez-faire government policies

3. Expansion of credit
In the 1920s, there was a rapid growth in bank credit and loans.
Encouraged by the strength of the economy people felt taking on debt was not a problem. They wanted things like appliances, cars, etc. NOW!
Businesses took out more loans for expansion.
Because people became highly indebted, it meant they became more susceptible to a change in the economy.

4. Stocks were the way to prosperity
Related to buying on credit was the practice of buying shares on the margin.
This meant you only had to pay 10 or 20% of the value of the shares; it meant you were borrowing 80-90% of the value of the shares.
This enabled more money to be put into shares, increasing their value, on paper. It is said there were many ‘margin millionaire’ investors. They had made huge profits by buying on the margin and watching share prices rise.
But, it left investors very exposed when prices fell. These margin millionaires got wiped out when the stock market fall came.
It also affected those banks and investors who had lent money to those buying on the margin.

5. Overproduction
The 1920s saw great strides in production techniques, especially in industries like automobiles.
The production line enabled great increases in production. However, demand for buying expensive cars and consumer goods were struggling to keep up because wages were not rising as fast as profits.
Therefore, towards the end of the 1920s many firms were struggling to sell all their production. This caused some of the disappointing profit results which precipitated falls in share prices.

6. Problems in agriculture
Even before 1929, the American agricultural sector was struggling to maintain profitability. The boom of WWI was over.
Many small farmers were driven out of business because they could not compete in the new economic climate.
Better technology was increasing supply, but demand for food was not increasing at same rate. Therefore, prices fell and farmers incomes dropped.
There was occupational and geographical immobility in this sector, and it was difficult for unemployed farmers to get jobs elsewhere in the economy.

7. Crop failures
Crop failures due to drought in parts of the country made things worse not better.
While it helped reduce the oversupply, it was too late.
Farmers that could make some money to pay their bills now had no crop to sell and lost everything.
Banks that had loaned to farmers failed.

8. Weaknesses in Banking
Before the Great Depression, the American banking system was characterized by having many small to medium sized firms with no government regulation.
America had over 30,000 banks.
The effect of this was that they were prone to going bankrupt if there was a run on deposits.
In particular, many banks in rural areas went bankrupt due to the agricultural recession.
This had a negative impact on the rest of the financial industry. Between 1923 and ,000 banks collapsed

9. People lining up to withdraw their money from banks.

10. 1928 Election Promises Spark Market Speculation
Herbert Hoover was the most promising candidate for president because of his ideas which promised increased economic growth in America.
In the end, the Republicans (Hoover) were identified with the booming economy of the 1920s, whereas Al Smith, a Roman Catholic, suffered politically from Anti-Catholic prejudice, his anti-prohibitionist stance, and the legacy of corruption of Tammany Hall, with which he was associated. 

11. Hoover takes the lead

12. Tariffs
Hoover believed in rugged individualism of the American people. He asked businesses to take voluntary actions to improve the economy. But he knew something had to be done to save the farmers.
One of Herbert Hoover's campaign pledges during the 1928 election campaign was to aid the American farmer and others by raising tariff levels on agricultural products.
The Smoot-Hawley Tariff Act of June 1930 raised US tariffs to historically high levels. This piece of legislation was originally intended to help protect domestic farmers against agricultural imports.
It in fact caused more suffering. It provoked a storm of foreign retaliatory measures. Farmers lost the overseas markets, hurting them more.

13. The bull is slain and the bear takes over
By October 1929, shares of stocks were grossly overvalued.
When some companies posted disappointing results on October 24 (Black Thursday), some investors started to feel this would be a good time to cash in on their profits; share prices began to fall and panic selling caused prices to fall sharply.
Financiers, such as JP Morgan tried to restore confidence by buying shares to prop up prices. But, this failed to alter the rapid change in market sentiment.  
On October 29(Black Tuesday) share prices fell by $40 billion in a single day. By 1930 the value of shares had fallen by 90%. The bull market had been replaced by a bear market.

14. Two blackest days of 1929
Black Thursday, October 24, The day the famous stock market crash of 1929 began, when the stock market began its plummet. The stock market was very unstable for the subsequent few days.
This uncertainty led up to Black Tuesday, October 29, the day which experienced the largest percentage decrease in stock prices and is considered to be the start of the Great Depression.

15. Enter the great depression
While the stock market crash was not the only cause of the Great Depression, it marked its beginning.
For the next 10 years the world would suffer.

16. Video