1. Question 12: Analyze the causes of the Great Depression in one country in the Americas. Anmol Jammu

2. Thesis Statement The ultimate economic cause of the Great Depression in the United States of America was overinvestment and overproduction which exceeded consumer demand and purchasing power. This was complemented by the proximate economic factors of the banking crisis and protectionism. Through a combination of these, the Great Depression was inevitable and lasted much longer than an ordinary economic recession.

3. Historical Context World War I Broken international debt structure Compare and contrast to the Great Recession Similarity: Both had a global impact because of interdependent economies Difference: The Great Depression was more severe

4. Historian’s Perspectives Interpretation 1: Peter Temin and Keynesian economics Great Depression caused by too little consumer spending and demand for goods which decrease the money supply Governmental efforts to stimulate demand and increase purchasing power would have avoided such a severe depression Assumptions Temin takes a liberal and almost socialist viewpoint that assumes that increased government involvement and redistribution of wealth are required for a stable economy Criticisms The New Deal would have ended the Great Depression because it increased government spending Rebuttal: The New Deal was not large enough or properly implemented

5. Historian’s Perspectives Interpretation 2: Milton Friedman and monetarism Great Depression allowed to become so severe because of mistakes made by the Federal Reserve Board which led to deflation and decreased consumer spending Better monetary policy rather than increased government spending would have greatly lessened the impact of the Depression Assumptions Friedman takes a conservative viewpoint that assumes that the most effective economy is one in which the government has minimal involvement in the free trade system by avoiding spending and maintaining a small deficit

6. Historian’s Perspectives Conclusion: Temin’s Keynesian viewpoint is more valid as it takes a holistic approach to the issue by providing an explanation for deflation in terms of supply and demand and incorporating it into a larger view of the causes of the Great Depression rather than looking exclusively at deflation and monetary policy.

7. Argument 1: The ultimate economic cause of the Great Depression was overinvestment and overproduction which exceeded consumer demand AmeriTrust Co. business cycle data chart (Document A) shows a bull market boom shortly before the Depression Harold Syrett from A History of the American People (Document F) writes that the boom was “competitive bidding rather … any fundamental improvement in American corporate enterprise” In 1928, unemployment for nonfarm employees was almost 7% with an overall trend of further increase (Document E) Interview with typical cotton mill worker discussing how little purchasing power Americans had (Document I) 60% of Americans were in poverty (Document K) President Coolidge and General Motors executives encouraged investors to keep investing in businesses regardless (Documents B and C) Cartoon of overproduction in farms (Document N)

8. Argument 2: A proximate economic (and social) cause of the Great Depression was the banking crisis 60 percent of all automobiles and furniture were bought on installment because debt was no longer perceived with a negative connotation (Document H) People began buying on margin with as little as 10% down for a stock purchase (Document G) The fall of one bank often led to the fall of other banks (Document L)

9. Argument 3: Another proximate economic cause of the Great Depression and the reason it became more than just a recession is the increase of protectionism in the United States America and its tariff policy were portrayed as a fortress in a cartoon from Zurich (Document O) Hawley-Smoot tariff (Document P) New York Times article on direct payments from Germany (Document D)

10. Conclusion Challenging the question: Is it really worth analyzing the causes of the Great Depression? Aren’t economic recessions simply inevitable in a capitalist economy? Perhaps a better question is not why the Great Depression happened, but rather what caused it to be so severe.