Social Studies 10 Lessons

By: Gen L

Lesson 3: The Great Depression

Causes of the Depression

• Wheat prices dropped in 1927 due to overproduction
  • High supply + Low demand = lower prices.
• Many industries were overproducing goods
• Stockpiling lead to reductions in production & layoffs
• Germany defaulted on reparations payments to Britain & France,
• Britain & France were unable to pay war loans to US
• Economic optimism was destroyed & confidence was lost.

1929 Stock Market Crash

• Growth in stocks fueled interest in investment
• Optimism led to confidence & people were investing money they didn't have yet.
• Many investors bought on margin (speculating)
• Lack of regulation - some investments were fraudulent.

Black Tuesday

• 29 October, 1929: Stock exchanges in New York, Toronto & Montreal crashed.
• Investors panicked & sold stock as prices dropped.
• Oversight companies & individuals were ruined, resulting in large scale unemployment.
• Countries around the world fell into a deep depression.

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