Parents and Teachers: Support Ducksters by following us on Ducksters Facebook or Ducksters Twitter.
Ducksters Educational SiteDucksters Educational Site
History Biography Geography Science Games

The Great Depression

Causes

History >> The Great Depression

What caused the Great Depression?

There wasn't one event or a single factor that caused the Great Depression. It took a number of conditions all happening at once to make the economy go so bad. We'll take a look at some of the major factors below.

Stock Market Crash

The start of the Great Depression is usually considered the Stock Market Crash of 1929. The market crashed from "over speculation." This is when stocks become worth a lot more than the actual value of the company. People were buying stocks on credit from the banks, but the rise in the market wasn't based on reality.

When the economy began to slow, stocks began to fall. In October of 1929, people panicked and began selling stocks like crazy. The stock market crashed and many people lost everything. Although the stock market crash wasn't the only cause for the Great Depression, it certainly helped to get it started.

Farmers Struggle

Farmers had been having a tough time for much of the 1920s before the Great Depression started. With new machinery, farmers were growing more crops than ever before. However, this caused prices to drop so low that they couldn't make any profit.

When the Great Depression hit, things got even worse for farmers. In the Midwest, a drought started that would last until 1939. With no rainfall, the soil turned to dust. Many farmers couldn't pay their bills and lost their farms. They migrated to California hoping to find work.

People Borrowing Too Much

In the 1920s, there were lots of new products available like automobiles, washing machines, and radios. Advertising convinced people that everyone could afford these items by borrowing money. As a result, many people went into debt buying products they couldn't afford. When the economy went bad, many families couldn't make their payments.

Too Many Goods

In the 1920s, the economy was booming. Companies built new factories and hired more workers. Soon companies were making more products than they could sell. When the Great Depression started, companies had to lay off workers and halt production. This had a negative affect across the entire economy.

Banks and Money

One of the major factors that led to the Great Depression was the failure of the banking system. In the first few years of the Great Depression, over 10,000 banks failed. Many people lost their life savings. Some people went from being rich to having nothing. The U.S. government did little at the time to help the banks survive.

World Debt and Trade

The entire world economy was struggling at the time of the Great Depression. The U.S. had loaned billions of dollars to its allies recovering from World War I. As these countries struggled, they could not pay back the U.S.

A new law called the Smoot-Hawley Tariff Act was passed in 1930. It placed high tariffs (taxes) on imports. This hampered trade with other countries and helped to slow down the economy.

Interesting Facts About the Causes of the Great Depression Activities More About the Great Depression
Overview
Timeline
Causes of the Great Depression
The End of the Great Depression
Glossary and Terms

Events
Bonus Army
Dust Bowl
First New Deal
Second New Deal
Prohibition
Stock Market Crash

Culture
Crime and Criminals
Daily Life in the City
Daily Life on the Farm
Entertainment and Fun
Jazz
People
Louis Armstrong
Al Capone
Amelia Earhart
Herbert Hoover
J. Edgar Hoover
Charles Lindbergh
Eleanor Roosevelt
Franklin D. Roosevelt
Babe Ruth

Other
Fireside Chats
Empire State Building
Hoovervilles
Prohibition
Roaring Twenties


Works Cited

History >> The Great Depression





About Ducksters Privacy Policy   

Follow us on Ducksters Facebook or Ducksters Twitter

This site is a product of TSI (Technological Solutions, Inc.), Copyright 2018, All Rights Reserved. By using this site you agree to the Terms of Use.

MLA Style Citation