1. Causes of the Great Depression

2. Agricultural Problems
Farmers suffered from debt and low market prices throughout the 1920s

3. High Tariffs
Under Harding and Coolidge high tariffs hurt international trade and American farmers; at the same time the U.S. government was demanding the Europe pay its loans under the Dawes Plan—global depression was looming

4. The Structure of Business
A few corporations dominated the market
Increased productivity created a surplus of goods
The nations economy became dependent upon the success of these few corporations

5. The Maldistribution of Wealth
Money was concentrated in the top 5% of the population
The common worker with stagnant wages could not afford to purchase luxury goods except on credit

6. Excessive Use of Credit
Installments plans (buying on credit) ultimately led to bankruptcies went the depression hit

7. Stock Market Speculation
No longer long-tern investors, just short term speculators who borrowed on the assumption that the stock prices would continue to rise (had done so for 18 months)—hard work not necessary to get rich
Buying on margin allowed those who could not afford it to but stock, too

8. Stock Market Crash
Black Tuesday, October 29, 1929: Unexpected selling frenzy. Those who had bought on margin were forced to sell to try to cover losses from the previous weeks. When clients attempted to withdraw their money from the banks, there was no reserve to draw from.