DBQCausesoftheGreatDepression.docx - Causes of the Great...

Causes of the Great Depression Document Based Essay
Directions: The following assignment requires you to answer the questions below and to construct a coherent
essay that integrates your interpretation of Documents A-J and your knowledge of the American economy
during the 1920's. You must use and cite at least 50% of the documents for full credit.
How did the six factors of 1. Problems for Farmers, 2. Uneven Distribution of Wealth, 3. Overuse of Credit,
4. Problems for Business and Industry, 5. Crash of the Stock Market, and 6. Run on the Banks cause the Great
Depression? Be sure to explain all six causes AND identify which one you believe was the biggest cause and
why.
Document A
Document B
The final development that set the stage for the collapse of American prosperity in 1929 was the speculative
boom that developed with increasing intensity in the years after 1927. As more investors put their money into
securities (stocks) in the hope of making a quick profit on a speculative rise in stocks, the character of the New
York Stock Exchange was fundamentally altered. Instead of serving primarily as a device for the accumulation
of capital of industrial enterprises, the exchange became a betting ring where people gambled on stocks in
much the same fashion that gamblers wagered on roulette or horse races. Security prices were forced up by
competitive bidding rather than by any fundamental improvement in American corporate enterprise.

- Harry J. Carman and Harold 0. Syrett, A History of the American People, 1952.
Document C
Source: Table constructed from data In Frederick Lewis Allen, The Big Change, 1952
US Family Distribution of Income (1929)
Annual Income Percent of Families Earning this Income
Over $10,000 2%
$5,000-$10,000 6%
$2,000-$5000 32%
$1,500-$2,000 18%
$1,000-$1,500 21%
Under $1,000 21%
Document D
[Easy] margin requirements permitted the investor to enter the market on a shoestring. By buying on margin,