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There were several major causes of the Great Depression in the United States.
1. Unequal distribution of wealth. There was not a large middle class. While wages were rising for the majority of workers, they were not keeping pace with the increase in the cost of living or the wealth in the hands of the industrialists and others in the upper income classes.
2. There was over speculation in the Stock Market, which was not regulated. Many Americans purchased stock on credit. This was known as margin buying.
3. Increased manufacturing and agricultural output, but wages that did not keep pace for the consumers to purchase all that was produced or grown. Hence, inventories increased and agricultural income remained low.
4. Buying on credit, known in the 1920s as installment buying. People purchased things like refrigerators on time, and did not have money to pay for the product in the future, when the bills became due.
5. Federal regulations on businesses also contributed to the cause. Especially favorable to the large corporations were the taxes laws which were written to encourage business expansion.
6. Banks were permitted to speculate in land and the Stock Market with little government regulations.
7. High tariffs and war debts helped spread the depression world wide.
8. The Stock Market Crash of 1929 signaled the beginning of the Great Depression.
Germany ceased reparation payments
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∙ 6y ago
Wiki User
∙ 10y agoThe stock market crash was the big economic catalyst. This lead to many people losing their jobs, businesses failing and banks not having enough money for people to even take out their own money to live off.
Wiki User
∙ 12y agothe stock market crash was one of the major contributers of the Depression
Wiki User
∙ 12y agothe main factor is less demand in the market as compared to production.
Wiki User
∙ 14y agoover production- under consumption
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∙ 10y agomoney lose
Kay Shiesty
Inflation
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