I'm not a guru on the depression but I think I can help you out.
The creation of the Federal Reserve allowed "paper reserves" to be used besides the gold standard, this certainly had a big effect on causing the Great Depression.
Here is an excerpt from Greenspan's 1966 essay:
http://www.321gold.com/fed/greenspan/1966.html
"Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors.
When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's."
The irony is that the Fed, which caused the depression, is widely considered to have had the power to end the depression (view of Milton Friedman and Bernanke), but did not step up to the plate.
You can also watch for free this PBS documentary showing the crash of 1929:
http://www.pbs.org/wgbh/amex/crash/program/index.html
You can see with little doubt that the stock market crash was manipulated by the rich and powerful, who were able to profit by the expansion and contraction of the value of stock. 80 years later the hearts of man have not changed, but the Federal Reserve, which is not a government agency but a private banking cartel, has the same power, only now the value of the paper they are manipulating is not stock but the dollar.
Also this free mini ebook pdf (16 pages) was recommended to me:
"Great Myths of the Great Depression"
http://www.mackinac.org/article.aspx?ID=4013
I haven't read it yet but it's supposed to look at the Great Depression through the eyes of those who understand the free market (if anyone here has read it, feel free to give your thoughts).
Hope that was useful.
