Causes of the Great Depression
Shelby Allen, 1929
Stock Market Crash.
The Stock Market, October 29, 1929, is one and the same with the Great Depression.
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Two months after the original crash in October, stockholders had lost more than $40 billion dollars.
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stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression
Bank Failures
In 1930s over 9,000 banks failed. Bank deposits were uninsured and banks failed people simply by losing their savings. Banks stopped being as willing to give out loans.
Drought Conditions
The drought that occurred in the Mississippi Valley in 1930 caused many to not be able to pay their taxes. Also caused other debts to not be paid. Farmers had to sell their farms for no profit to themselves.
Reduction in Purchasing Across the Board
When stock market crashed everybody stopped purchasing things. This led to a huge reduction in the number of items produced. When the numbers reduced the amount of workers also were reduced.
Economic Policy with Europe
Government created the Smoot-Hawley Tariff in 1930 to help protect American companies. the tariff caused high tax for imports from foreign countries. Some countries retaliated economically against the US.