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Banks began lending less money to foreign countries .
This was because the US had relatively high interest rates. -
There was an increase in people making risky loans.
This was because of the low interest rates as it encouraged people and banks to make risky loans. -
There was a reduction in consumerism and purchases and more investment in stocks
Efficient machinery led to overproduction and low demand. This led to people losing their jobs. The reduction in purchases was out of fear of losing money after the stock market crash. People of all classes made far less purchases. Before this, the interest rates were lower so people were taking out loans and buying more and more, so this sudden halt came as a surprise to everyone. -
A drought occured.
This was not a direct cause of the Great Depression, but it made matters worse, particularly for the farmers in the Mississippi Valley which was nicknamed 'The Dust Bowl' -
Uneven distribution of money was prevalent.
This uneven distribution of money led to severe economic problems. People began to struggle to afford the most basic of needs. -
People suffered due to bad economic decisions.
People were hurt because of their use of credit and installment plans which left them little money to purchase things. This led to people having to sell their things. -
There was an increase in unemployment rates.
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People sold their stocks - Black Thursday
Since the stock market went down for 3 years, people were afraid of what would become of their stocks so they started selling their stocks super cheaply and all of them did it at the same time which really hit the whole economy negatively. -
Stock Market Crash
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People sold their stocks - Black Tuesday
This is what like happened on Black Tuesday but on an even larger scale. People sold their stocks for the same reason they did so on Black Thursday -
Bank Failures began to occur
Bank deposits weren't insured, so when banks failed people simply lost their savings therefore continuing the Great Depression -
The Smoot-Hawley Tarrif was introduced.
As businesses began to fail, America made a policy with Europe to help protect American companies. This charged a high tax for imports, leading to less trade between America and foreign countries. This led to even more job loss. -
The gold standard came with the depression leading to what was effectively a stalemate.
This was a system in which every currency is backed by gold. The Great Depression frightened people into hoarding gold, making the system untenable. -
Unemployment rates rose.
Unemployment rates rose, as one would have to not work at all or work for free. This only worsened the Great Depression.
