During this time people were buying a lot of shares in publicly traded companies, but when the companies began to suffer it made the share holders very nervous. The share holders began to pull back their support and attempt to resell their shares in the hope that they would not lose a large amount of money. Another thing was that people we not buying things and when they were they were buying on credit. People were also borrowing a lot of money from banks and they could not afford to pay back the banks, so they foreclosed their homes and valuables. These factors lead to the Stock Market Crash which happened on October 29.1929. On this day people sold an enormous number of their shares because the stock market prices were falling at an alarming rate. This day known as Black Tuesday led to the United States entering the period known as the Great Depression.
Some of the causes of the Great Depression included struggling industries, housing starts falling off, farm product surplus, prices falling, and consumers having less money to spend. The basic industries weren’t making very much profit. Some industries that took the biggest hit were the lumber and mining industries. The boom industries such as the automobile and construction were also not doing well at this time. Another cause of the depression was that housing starts began to fall, thus the number of new houses being built had dropped dramatically. When people weren’t buying or producing new houses, it also affected other industries such as the furniture business and the demand for new products.
The farmers were also having a very hard time making money so they started to buy more land in hopes of making more money by producing more crops. This actually made the prices worse; so many farmers took out loans. Most of them couldn’t pay back the loans so the bank foreclosed on their property as payment. With the farmer planting more it made the prices fall drastically. Probably the most important cause was that the consumers had less money, which made it hard for businesses to make money, because they were not selling anything. This made the consumers begin to start living on credit and started the slide into depression.
I think that living through the Great Depression would have been terrible. I believe that the two biggest causes of the Great Depression was the Stock Market Crash and that the consumers did not have money to buy any of the products that the businesses were making. I think that if people would not have sold their shares in businesses as quick as they did, maybe the Great Depression could have been prevented. All in all I think it would have been terrible to live through this time period.
Sources:
Causes of the Stock Market Crash
Causes of the Great Depression
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