Causes of the Great Depression

1. Causes of the Great Depression

2. Mellon Tax Bills The Revenue Acts of 1924, 1926, and 1928 were known collectively as the Mellon Tax Bill. They were introduced by Andrew Mellon, who served as Secretary of the Treasury from 1921 through 1931. The tax bills, driven by supply-side economics, were intended to put more money into the hands of the consumers by lowering the federal income tax. They later learned that the tax bill contributed to the rampant spending trend of consumers, which in turn led to over production of goods.

3. Coolidge and Economic Prosperity

4. Important Dates

5. Black Thursday The rapid increase in American industrialization was fueling growth in the economy, and technology improvements had the leading economists believing that the up rise would continue. Billions of dollars were invested in the stock market as people began speculating on the rising stock prices and buying on margin. The enormous amount of unsecured consumer debt created by this speculation left the stock market essentially off-balance. Many investors, caught up in the race to make a killing, invested their life savings, mortgaged their homes, and cashed in safer investments such as treasury bonds and bank accounts. Finally, in October 1929, the buying craze began to dwindle, and was followed by an even wilder selling craze. On Thursday, October 24, 1929, the bottom began to fall out. Prices dropped precipitously as more and more investors tried to sell their holdings.

6. Multimedia Citations Slide 2: http://memory.loc.gov/service/pnp/cph/3b30000/3b39000/3b39400/3b39465r.jpg Slide 3: http://americancorner.org.tw/AmericasLibrary/assets/jb/jazz/jb_jazz_coolidge_1_e.jpg Slide 5: http://yaleglobal.yale.edu/display.image?id=7251