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Cause of the Great Depression
There is no one defining reason or event that caused the Great Depression. A decade of frivolous buying and poor business decisions led to this catastrophe. Also, adding in a hands off, laissez faire federal government only worsened the situation. The outcome of all of this would lead to the worst economic crisis in United States history.
Cause #1: Consumer Culture and Buying on Credit
Some Popular Consumer Items and Advertisements
Some Popular Consumer Items and Advertisements
Cause #2: The Distribution of Wealth Wealth
Distribution Graphs and Statistics • Rise in per capita income for top 1% of population, 1920-1929: 75%
• Percentage of American Families with no savings: 80%
• Percentage of savings held by top .1% of Americans: 34%
• Percentage of savings held by top 2.3% of Americans: 67%
• Minimum income deemed necessary for a decent family standard of living: $2500
• Percentage of American families with incomes under $2500 in 1929: 71%
Distribution Graphs and Statistics • Rise in per capita income for top 1% of population, 1920-1929: 75%
• Percentage of American Families with no savings: 80%
• Percentage of savings held by top .1% of Americans: 34%
• Percentage of savings held by top 2.3% of Americans: 67%
• Minimum income deemed necessary for a decent family standard of living: $2500
• Percentage of American families with incomes under $2500 in 1929: 71%
Cause #3: The Failure of the Farms
Farm/Agricultural Economy Graphs and Statistics
Cause #4: Buying on Margin
Cause #5: The Stock Market Crash
“There may be a recession in stock prices, but not anything in the nature of a crash.”
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929
Cause #6: Bank Runs