The Great Depression Notes

Causes of the Great Depression

- Factories and farms produce more goods than people can buy. - Banks make loans that borrowers cannot pay back. - After the stock market crash, many businesses cannot find people who will invest in their growth.

Effects of the Great Depression

- Many banks fail. - Many businesses and factories fail. - Millions of Americans are out of work. - Many are homeless and hungry. - Families break up and people suffer

Investment practices that most destabilized the stock market.

Stock speculation and buying on margin made the stock market very unstable. Investors made risky investments with very little money to back them up, and the stock market became overvalued.

speculating

Taking large risks when buying stocks, especially with respect to trying to predict the future; gambling, in the hopes of making quick, large gains (getting rich quick).

Three existing economic conditions that contributed to the Depression

Uneven distribution of income High tariffs Low interest rates

Black Tuesday

day the stock market crashed, signaling the start of the Great Depression

relief program

government program to help the needy

buying on margin

practice that allows people to buy stock with a down payment of a portion of the value

bankrupt

unable to pay debts

Great Depression

worst period of economic decline in United States history, beginning in 1929