Question

explain any five point
that lead to a great depression in 1929​

Answer 1

Answer:

5 Causes of The Great Depression

1. Stock Market Crash of 1929: The stock market crash that occurred on Black Tuesday, October 29, 1929 was one of the major causes that led to the Great Depression.
2. Bank Failures: Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks stopped willing to create new loans. This exacerbated the situation leading to less and less expenditures.
3. Reduction in Purchasing Across the Board: With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant less spending to help alleviate the economic situation.
4. American Economic Policy with Europe: As businesses began failing, the government created the Smoot-Hawley Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation.
5. Drought Conditions: While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves.

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