What was the main cause of the Great Depression?

The primary cause of the Great Depression is often attributed to stock market speculation. Leading up to the Great Depression, the 1920s saw a significant market boom characterized by rampant speculation where investors were purchasing stocks with the hope of selling them at a profit rather than for their intrinsic value. Many people invested heavily, often using borrowed money, which created an unsustainable bubble. When stock prices began to fall in late 1929, it triggered widespread panic and led to a massive sell-off, resulting in the stock market crash of October 1929. This crash not only wiped out the savings of millions but also eroded consumer confidence, leading to a severe decline in economic activity, business failures, and massive unemployment, which defined the Great Depression that followed.

While other factors, such as high tariffs, overproduction, and international economic problems stemming from World War I reparations, contributed to the economic climate of the time, they do not explain the onset of the crisis in the same direct manner that stock market speculation does. Instead, they were more reflective of the broader economic issues that were exacerbated by the initial crisis triggered by the stock market collapse.