What was a primary cause of the Great Depression?

The primary cause of the Great Depression was the stock market crash of 1929. This catastrophic event significantly undermined consumer and business confidence, leading to a sharp decline in spending and investment. When the stock market crashed, millions of investors lost their savings, which resulted in widespread panic and a loss of wealth. The crash triggered a domino effect on banks and businesses, leading to massive bankruptcies and a surge in unemployment. As banks failed, savings were wiped out, and credit became scarce, further exacerbating the economic downturn.

The stock market crash is often viewed as the catalyst that set off a series of economic problems, including reduced consumer spending, falling prices, and a collapse in international trade. This led to prolonged hardship, deflation, and the eventual establishment of programs aimed at recovery during the New Deal era.

While excessive government spending, World War I expenses, and increased immigration contributed to various economic conditions in the 1920s and beyond, they were not direct triggers of the Great Depression in the way the stock market crash was. The immediate impact of the crash was felt across the economy, making it a defining moment in American history.