Causes of the Great Depression in America CH.2

natashaeggs
Mind Map by natashaeggs, updated more than 1 year ago
natashaeggs
Created by natashaeggs about 5 years ago
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Mind Map on Causes of the Great Depression in America CH.2, created by natashaeggs on 03/11/2015.
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Causes of the Great Depression in America CH.2
1 Wall Street Crash
2 Uneven distribution of wealth
2.1 income distribution
2.2 employment
2.3 old industries
2.4 Women
2.5 Native and African-Americans
3 Rural poverty
3.1 Farmers' economic problems
3.2 role of government
3.3 agirculture businesses
4 Instability of 'get-rich-quick' schemes
4.1 Florida land boom (1920-1925) - people invested in unseen developments hoping to sell and make quick profit- but demand tailed off in 1926 - hurricanes in 1926 killed 400 and left 50,000 homeless - people were bankrupt and the land boom collapsed
4.2 Stock market speculation - 1927-1929 - people invested in stocks and shares as a speculation - if prices rose shares were sold -quick and easy profit - eg Radio Corportation of America rose from 85 to 420 points in 1928 alone
5 Problems with the banking system
5.1 out of date by 1920s
5.2 the reserve banks represented the interests of the bankers and so could not be relied on to act in the best interests of the nation if there were conflicts of interests
5.3 local state banks didn't have to join the centralised system, most people's money was invested in the local banks so they lost all their money
5.4 reserve banks limited the amount of money in circulation during GD -> high interest rates for banks and less money available for borrowing
6 Cycle of international debt
6.1 loan repayment was a major problem
6.2 Dawes and Young Plans - meant US was paying itself the money back
6.3 US investment abroad - Europe had borrowed loans that the US needed them to payback but the countries just could not afford to or make the money in order to
7 Slowdown in the economy
7.1 small businesses -growth of huge corporations with huge marketing power -absorbed smaller ones - or smaller ones couldn't compete - e.g motor vehicle companies from 108 in 1920 to 44 by end of decade
7.2 construction industry - boom in 1920s- demand tailed off after 1926 - fall in demand for materials, skills and transportation - unemployment and knock-on effects followed
7.3 falling domestic demand- production outstripping demand - market flooded with goods that couldn't be sold
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