Many people have heard of the Great Depression, but what caused this economic downturn? One of the great signifiers of the beginning was the Stock Market Crash of 1929. With that came the disaster of thousands of banks collapsing through the 1930’s. With the failure of financial institutions came a reduction in personal spending. These three factors helped bring about this awful disaster. In the beginning came Black Tuesday 1929. That day the value of shares in the Stock Market plummeted, causing people to lose fortunes. Within two months shareholders lost nearly 40 billion dollars. With no end in sight the country braced itself for the eventual repercussions of major companies and wealthy citizens losing so much capital in such a short time.
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Throughout the 1930’s, 9,000 banks failed. This means that any bank that overstretched itself through loans could declare bankruptcy. Any person with funds in that bank would simply lose their entire life savings. Also, people stopped investing their money in banks, and banks stopped offering loans creating a series of continued problems. A final cause came because of this lack of personal and commercial investment. Whether because of a loss of personal finances or a lack of commercial options, people stopped buying things. Without money to buy things the market continued its downward spiral, bringing banks and personal finances with it. This lack of personal spending perpetuated the problem of dwindling market values. In the end the causes of the Great Depression were byproducts of each other. Starting with problems of an overextended market that crashed and died quickly over a few months, the spiral began. From there the failure of banks coupled with a lack of purchasing destroyed exchanging finances. Thus the United States created and endured the greatest financial disaster of the
Throughout the 1930’s, 9,000 banks failed. This means that any bank that overstretched itself through loans could declare bankruptcy. Any person with funds in that bank would simply lose their entire life savings. Also, people stopped investing their money in banks, and banks stopped offering loans creating a series of continued problems. A final cause came because of this lack of personal and commercial investment. Whether because of a loss of personal finances or a lack of commercial options, people stopped buying things. Without money to buy things the market continued its downward spiral, bringing banks and personal finances with it. This lack of personal spending perpetuated the problem of dwindling market values. In the end the causes of the Great Depression were byproducts of each other. Starting with problems of an overextended market that crashed and died quickly over a few months, the spiral began. From there the failure of banks coupled with a lack of purchasing destroyed exchanging finances. Thus the United States created and endured the greatest financial disaster of the