What were the domestic and international causes of the Great Depression?

Answer 1

Around the world a slump in agriculture contributed, prices of farm products dropped. Farmers didn't share the growth with the economy and poverty rates increased in rural areas.

In 1927 there was a boom in the stock market. Even though prices were rising business activity was decreasing. After WWI Britain and France forced Germany to repay billions of dollars that were spent on the war. This crippled the German economy causing financial strain across Europe, forcing many banks to close. At the same Tim the U.S force Britain and France to pay for loans and supplies during the war. The U.S loaned millions to Germany and the Germans used these loans to pay back Britain and France. Britain and France used that money to pay back the U.S loans.

On 10/24/1929, also called Black Thursday stock losses were at 9 billion by noon.It dropped even more by Tuesday. After three weeks 26 billion was gone. The crash upset the balance between the U.S and Europe.

During the 1930's an economic crisis caused money to drain from one country to another. Especially when gold supplies went from one country to another. To stop this nations withdrew from international economy. With that foreign investors withdrew fom U.S banks.

Answer 2

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.