Causes of the Great Depression

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Causes of the Great Depression
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False Prosperity
Low taxes
Overproduction in farm machines, radios, cars,
refrigerators
Too much consumer credit
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Stock Market Crash
Too much buying on margin.
Black Tuesday, October 29, 1929 over 16 million
shares dumped
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Banking Crisis
Stock Market Crash caused people to panic,
withdraw money
Banks had used depositors money to invest in
stock market when market collapsed, the money
was lost
Banks closed 9000 in 1930
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Unemployment
Rose to 25 35 of total labor force (had been
less than 5 in the 20s)
Farm income declined 60 one-third lost land
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Trade Collapse
High tariffs block US trade
Weimar Republic unable to pay reparations to
European countries or US bank loans
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Republican Policy
Laissez-faire economic policies
Poor use of monetary or fiscal policies
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