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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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How does alcohol contribute to depression?
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How did the economic policies pursued by the US following World War 1 contribute to the Great Depression?
Between the war and the depression everything is related and all matters.
How did financial crisis contribute of the Great Depression?
Postwar reparations led to hyperinflation and economic collapse in Germany.
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