Causes of The Stock Market Crash:
In the 1920's, everything was going great! The economy was greatly helped by increase in companies, and the new technologies improving graciously so the average person started to earn a better income. When everyone started to earn more money, that meant that they would spend more and the stock prices rised. A lot of money was invested in stock and all was well. Soon, that came to an end and caused stock to go down in October of 1929. Everyone panicked and stock values dropped billions of dollars. Banks began to fail and it caused The Great Depression.
Causes of The Great Depression:
The Great Depression was causes by a variety of things, but there are a few that stood out the most. There was the stock market crash that obviously was a big one that I just stated. Banks failing was another reason because when the banks go in debt, then that causes everyone to lose their money. We also couldn't purchase a lot abroad. Everyone quit purchasing because they were afraid of further economic problems so that caused many people to start losing their jobs. There was also major droughts through the Mississippi Valley which was so bad that people couldn't pay their taxes or other debts they had.
Banks and Businesses Collapse:
The Great Depression was a very bad economic time. Banks and businesses were failing and losing people money. Banks had a lot of stock held, and when the stock market crashed the banks went wrong. All of the people were asking for their money back but the banks couldn't supply their money. Also, people tried to sell their stocks and they got nervous and it didn't work. Only a few very strong banks survived, and the weaker ones failed miserably.
The businesses in The Great Depression had issuses too. Since nobody had any money left, the businesses did not sell any goods because people were in debt and without money. Since they couldn't sell their goods, they didn't have enough money to pay for their expenses. There started to be reckless credit expansion in the businesses for the Federal Reserve System. Bussinesses cannot be run without the sales of goods so they collapsed. The men and women that owned bussinesses were then without jobs and had even less money. Everything was going wrong at the time of The Great Depression
I think that the Great Depression was a very hard time for everyone. I can't imagine not having any money right now and not being able to spend. I think our world would be totally different because people spend a lot of money these days!
Comments
Good job!