The Great Depression
Cause 1: The stock Market Crash
The stock market crash was basically the beginning of the Great Depression. October 29, 1929 was when everything went downhill. The stock market had been a promising investment until October 29, 1929. People all around the country flocked to where the stock was happening; investors buying and selling. The stocks were at a major raising point in 1928. The stocks had convinced people that investing was a promising way to become rich. So people bought the on margins. Margins are money on loan from the bank to keep the stock from crashing. The turning point was a fast downward spiral. Once the stocks kept decreasing people were lining up to sell their stocks and get out before they lost everything. Since everyone was selling and no one was buying the stocks, the stocks became worthless. Now that all these sales were happening the ticker couldn’t keep up and fell behind buy 2 ½ hours. This was the worst day for the stock market history. There are people who are trying to find the real reason that the stock market crash and to prevent the crash from happening again. The stock market investors are doing everything to keep the stocks going and from having another “Black Tuesday.”
Cause 2: Bank Failures
In the 1930’s some 9,000 banks closed. The banks closed because during the stock market crises the banks had been loaning out money that they didn’t have. In some case the bank invested the peoples’ money in stocks. Then when the crash happened people went to their banks to get their money, but the banks where closed because they didn’t have the money to give to the people. The banks also used the peoples’ money to loan off. So farms couldn’t get the money they needed to keep their farms going.
Cause 3: Reduction in purchasing a crossed the board.
When the banks close people stopped buying unnecessary items. By not buy as much people were able to save what little money they had left to support their families. Without people buying items people lost jobs.
Cause 4: American economic policy with Europe
So basically this was the raising of taxes on imported good to protect American companies. In doing this, it caused Europe to want to buy from another country.
Cause 5: Dust Bowl
This was not a direct cause of the Great Depression it just made matters worse. The dust bowl happened during the 1930’s and lasted a decade. The dust bowl hit the Midwest. Basically the dust bowl was caused by the plowing off the prairie grass that held the topsoil in its place, also there was the drought. The dust storm killed the agriculture and the livestock, leaving the farmers with nothing but to profit from. So the farmers packed up their family and head for jobs in the city but when they got there, the jobs they heard about were gone and the families had to live in Homerville and be known as hobos. The farmers may not have had a family to take because of pneumonia. I like to think of the dust bowl like a blizzard in winter, but instead of snow you got dirt.
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