Who was the President in the Great
Depression?
Republican
president Herbert Hoover served in office from March 4, 1929 to March 4, 1933.
The peak of the Great Depression was between 1932
and 1933. On March 4, 1933 the Democrat, Franklin D.
Roosevelt, was inaugurated as the new president of the
United States and the crisis slowly began to improve.
Great Depression - Soup Kitchen
|
Causes of the Great Depression: Fast Fact Sheet
Fast, fun facts and Frequently Asked Questions (FAQ's)
about the Causes
of the Great Depression.
What was the Causes of the Great Depression?
There were many causes of the Great
Depression that included the following:
● Irrational
optimism and overconfidence in the 1920s
● 1929 Stock Market Crash
● Bank
Closures and weaknesses in the
banking system
● Overproduction of consumer goods
● Fall in demand and the purchase of
consumer goods
● Bankruptcies and High levels of debt
● Lack of credit
● Unequal distribution of wealth
● US Economic Policies & Policies of
Protectionism and Isolationism
● Loss of
exports
● Failures
by the Federal Reserve
● The 1932 Drought, Dust storms and
the Dust Bowl
● Mass Unemployment caused by all of the
above
Causes of the Great Depression
The Causes of the Great Depression
Causes of the Great Depression
Facts for kids
The following fact
sheet contains interesting facts and information on Causes of the Great Depression
Facts
about the Causes of the Great Depression for kids
Causes of the Great Depression Fact 1:
Causes - Overconfidence:
For Middle Class Americans the
Roaring Twenties was a time of great prosperity.
Industries boomed which led to the
1920s Economic Boom.
It was an era of modernism, excitement, new ideas and it
was the age of the automobile. People felt invincible
and became overconfident believing that the prosperous
period would never end.
Causes of the Great Depression Fact
2: Causes - Consumerism:
The irrational exuberance of the Roaring Twenties led to
the rise of
Consumerism in 1920's America and people were encouraged to acquire new
product in ever-increasing amounts through mass
advertising in the newspapers and via the radio.
Causes of the Great Depression Fact
3:
Causes - Easy Credit: Once
"thrifty and prudent" Americans threw caution to the
wind, careless of rising debt, and purchased consumer
items on easy credit. Stock Brokers promoted the idea of
"Buying on Margin" - encouraging enthusiastic investors
to buy stocks with money loaned from the stock broker.
Nearly 4 million Americans engaged in heavy speculation,
gambling on the Stock Market.
Causes of the Great Depression Fact 4:
Causes - Overproduction:
The
demand for goods, massive increases in sales, modern
technology, new machinery and the adoption of systems such as the
Assembly Line coupled with overconfidence in industries resulted in
the overproduction of consumer goods.
Causes of the Great Depression Fact
5: Causes - 1929 Wall Street Crash:
Overconfident Americans believed the Stock Market was
also invincible. Wall Street had enjoyed amazing profits
from the 'Long
Bull Market' in which share prices rocketed from an
average of $50 per share in 1922 climbing to an enormous
$350 per share in 1929.
The
1929 Wall Street Crash
was greeted with shock, horror, fear and disbelief.
Stock brokers began to make Margin Calls and there was
widespread panic-selling of
all stocks. Between $10-$15 billion was lost on Tuesday,
October 29, 1929 (Black Tuesday) as the stock
market completely collapsed due to the plummeting share
prices. There was an 89% decline in stock prices.
Causes of the Great Depression Fact
6: Causes - The Banks:
There were virtually no federal
regulations to control banks in the 1920s and small banks had recklessly invested
their customer's money on the stock market, buying stocks on margin
with customers’ savings and loaning money to stock market investors . When
the Wall Street Crash came small banks lost money and defaulted on their
loans. There were runs on banks who did not have the assets to respond to the withdrawal
requests of their customers. Small banks were forced to close.
During the 2 years following the Wall Street Crash over 3000 banks
went bankrupt - over 10% of the nation's total. Banks that did
survive stopped lending money, making less credit available
and the economy fell into recession.
Causes of the Great Depression Fact
7: Causes - Bankruptcies:
Over 20,000 companies and business went bankrupt and
closed. The high levels of debt and the Wall Street
crash led to the ruin of ordinary Americans who lost
their life savings, their homes and then their jobs.
Continued...
Facts
about the Causes of the Great Depression for kids
Facts about
the Causes of the Great Depression for kids
The following fact
sheet continues with facts about Causes of the Great Depression.
Facts
about the Causes of the Great Depression for kids
Causes of the Great Depression Fact
8: Causes - Lack of Credit:
Banks were reluctant to make any new loans in the
financial climate. The lack of credit meant that people
were unable to recover from the economic bust. The
downward spiral continued leading to foreclosures,
homelessness and unemployment.
Causes of the Great Depression Fact
9: Causes - Fall in demand:
The
market in consumer goods quickly dried up, too many
products were being manufactured due to overproduction and there
with too few people earning enough money to buy goods. Businesses
closed and this had a 'domino effect' on the companies
that supplied the companies who lost their orders and
were also forced to close.
Causes of the Great Depression Fact
10: Causes - Unequal distribution of
wealth: The Unequal distribution of wealth in the 1920's contributed to the
Great Depression. 40% of middle class Americans prospered during
the economic boom but the other 60% of Americans were poor and
were struggling to make a living even before the
economic bust. The whole of the nation began to suffer
during the Great Depression.
Causes of the Great Depression Fact
11: Causes - US Policies:
The
US Government policies of the 1920s contributed to the
Great Depression. The policy of
Isolationism in the 1920's, following WW1, led to
the passage of the1922 Fordney-McCumber Act that
introduced high tariffs the
(taxes) on foreign goods in
American history furthering the US policy of
Protectionism.
The Smoot-Hawley Tariff Act of June 1930 raised U.S.
tariffs to historically high levels creating protective
tariffs (taxes) and increased rates on imported goods.
Causes of the Great Depression Fact
12: Causes - Loss of exports:
It was vital to the US economy for Europeans to buy
American exports and US policies backfired as angry
European countries imposed a tax on American goods
making them too expensive to buy in Europe, and
restricting trade.
The
Loss of exports was due to the lack of cooperation
with Europe and the global effects of the Stock Market
crash. During the Great Depression U.S. exports to
Europe saw a massive fall from $2,341 million in 1929 to
$784 million in 1932.
Causes of the Great Depression Fact 13:
Causes - Failures by the Federal
Reserve: The Federal Reserve
failed in its fundamental task to act as a lender of last resort and
failed to stem the decline in the supply of money. The Federal
Reserve kept interest rates low throughout the 1920s
which encouraged banks to make risky loans believing
that the economy was expanding. The late decision to
raise interest rates in 1928 and 1929 was an attempt to limit
speculation in securities markets, but in effect slowed down
economic activity in the US and tightened credit.
The
failures by the Federal Reserve included a slow response
to the Great Depression. The
Gold Standard Act of 1900
had been passed to prevent the country from printing too much money and
running out of gold. The law restricted the Federal Reserve
from enacting policies which would significantly alter the growth of the
money supply and limit the inflation rate. The United States
continued to
retain the gold standard until April 25, 1933, when it was finally dropped
as a means of combating the
Great Depression.
Causes of the Great Depression Fact 14:
Causes - Drought and Dust Bowls:
The majority of the nation's farmers had suffered a severe
overproduction crisis during the 1920s that had resulted in low prices
of agricultural crops. In 1932 a devastating drought hit the farmers
and the soil turned to dust. Violent winds whipped the dry topsoil
creating terrifying dust storms destroying 100 million acres of
land. Crops were ruined, livestock were killed and 3 million
impoverished people became unemployed and homeless due to the
Dust Bowl.
Causes of the Great Depression Fact 15:
Causes - Mass Unemployment:
The
consequence of the Great Depression was Mass
Unemployment in the United States which extended the period of the
Great Depression. Over 12 million people became unemployed. At its
peak, over 12,000 people being made unemployed every day.
Facts
about the Causes of the Great Depression for kids
Facts
about
Causes of the Great Depression
For visitors interested in the history of
the Great Depression refer to the following articles:
Causes of the Great Depression - President Herbert Hoover Video
for kids
The article on the Causes of the Great Depression provides detailed facts and a summary of one of the important events during his presidential term in office. The following
Herbert Hoover video will
give you additional important facts and dates about the political events experienced by the 31st American President whose presidency spanned from March 4, 1929 to March 4, 1933.
Causes of the Great Depression
●
Interesting Facts about Causes of the Great Depression for kids and schools
●
Summary of the Causes of the Great Depression in US history
●
The Causes of the Great Depression, a major
event in US history
●
Herbert Hoover from March 4, 1929 to March 4, 1933
●
Fast, fun facts about the Causes of the Great Depression
●
Foreign & Domestic
policies of President Herbert Hoover
● Herbert Hoover Presidency and
Causes of the Great Depression for schools,
homework, kids and children |