Picture by Momentmal

Supply and Demand

 Tariffs had help the US consumer goods industries develop, but supply soon outstripped demand. People did not buy more telephones once they had one, so workers were laid off. The unemployed couldn't afford to buy more goods, so demand decreased. This led to more workers losing their jobs, and so on, in a downward spiral.

The stock market collapse

 In October 1929 some big investors began to sell their stock. This led to a crisis of confidence in the stock market and caused panic selling by many people. The price of stocks and shares collapsed. Many people found themselves owing vast sums of money to brokers because they had bought shares on margin. Thousands went bankrupt, banks closed and stocks become worthless.

Farming

 Farmers had never benefited from the boom. Food prices fell, but machinery was expensive and it put farm workers out of a job. Over-farming and a drought in the 1930s in the Central Plains turned the land into a dust-bowl.

Credit

 People who bought goods on credit found that when they became unemployed, they were unable to pay back the money they owed. This led to more business failing, thus increasing unemployment.