Causes for the Great depresion
1. Stock market of 1929
-ocurred on Black Tuesday
- Acurred on October, 29, 1929
- it was the day New yorks Stock Exchange crashed
- which means that stocks Were worth way more then they were worth.
- Then they fell sharply.
- marked the beggening of the Great Depresion
2. Bank Failures
- By 1933 11,000 of the 25,000 banks had disapeared.
- Began right of black tuesday, people withdrew their money from the banks
- which left the banks with no money to lend
On January 1, 1934, the Federal Deposit Insurance Corporation (FDIC) was established, and since that time, not one depositor has lost insured funds.
3.Reduction in purchasing across the board.
- With the stock market crash individuals were afraid of more econoci trouble so they stopped buyin things.
- This led to less items beeing purched, which ment a reduction in the work force.
- Without jobs people were not able to pay things they had bought trough installment plans and items were reposesed.
- the unemploment rose obove 25% which meant even less spending to help the economic situation
4. American economic policy with Europe
- bussinesses kept falling so the smoot-Hawley tarrif was passed in 1930 to help protect the american companies.
- They raised high tax on foriegn imports
- which meant no much foriegn trade, and more products being sold in the U.S
5. drought conditions
- wasnt a direct cause
- drought accured in Misssisspy valley in 1930
- it was really bad that people could not pay of theri debts and had to sell their farms for no profit for themselves.
- " The Dust Bowl.
Causes of the Stock Marcket Crash.
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