The Great Depression (Causes: Essay Topic)

- President during Depression

Problems in agriculture Uneven distribution of wealth Easy credit Speculation in the stock market High tariff policies / trade imbalance Mechanization of American industry

- farmers made up 25% of the jobs throughout the 1920s - End of WWI, demand for Amer. grain fell - Machinery created higher crop yields causing prices to drop & debt to increase (farmers were over - producing) - Rural depression began B4 Great Depression - could not enjoy \"boom\" of 1920s & entertainment

- Wages of industrial workers rose resulting in a higher standard of living - The wealthiest families earned nearly 50x what the average family earned, but did not purchase 50 times the product - (uneven distribution of wealth) either really rich or really poor, no middle - Under-consumption occurred as Americans bought less than was being produced

- People brought on credit, and eventually they didn't have enough income to make the payments - During the 1920s the explosion of new products - Speculation in stocks = \"Bullmarket\" - Many Americans lived beyond their means - belief the market will grow automatically and rapidly

Black Thursday (October 24, 1929) - The day the stock market began to see a massive sell-off by wealthy investors. Black Tuesday (October 29, 1929) - The day the stock market crashed and the spark to initiate the \"Great Depression\" of the 1930s. Great Depression - 1929 to 1941; economy collapsed & unemployment increased dramatically (25% unemployed and millions more underemployed) during the period

- To protect United States companies, Congress passed the bill in an effort to protect businesses - The new law raised tax rates on imports spurring retaliation by European Nations - Other nations unable to sell goods to U.S & could not afford U.S products.

- Federal Reserve cut interest rates, but limit the supply of money to discourage lending - Between 1929 and 1932, nearly 3,000 banks collapsed causing a strain on lending

- Without an infusion of capital (from banks), businesses were forced to cut workers and production - Hundreds of plants closed and many layoffs followed