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Causes of the Great Depression

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Presentation on theme: "Causes of the Great Depression"— Presentation transcript:

1 Causes of the Great Depression

2 The Great Crash Preceded by stock market boom
Black Tuesday (Oct 29, 1929) - 16 million shares traded - 1st visible sign of crisis

3 Causes of the Depression
Lack of Diversification in economy = growth depended on few industries

4 Causes of the Depression
Unequal distribution of wealth = workers could not afford products = surplus = layoffs

5 Causes of the Depression
Credit structure of the economy 1. Farmers in debt 2. Too much reliance on credit 3. Banks speculated in stock market

6 Causes of the Depression
Declining exports

7 Causes of the Depression
International debt structure 1. Allies owed US $ (war loans) 2. Borrowed $ from US banks to pay debt 3. Late 1920s, US banks less willing to loan $ & US tariffs made it difficult to sell products in US 4. Countries began to default on loans

8 Effects 9,000 banks closed; depositors lost $2.5 billion
Banking Collapse 9,000 banks closed; depositors lost $2.5 billion Declining $ supply = decline in consumer demand = layoffs GNP dropped, investment declined, unemployment increased

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