Causes of the Great Depression Imagine you have a job, a nice house, a car, and anything a person would need and then some and the very next day you lose it all. This happened to many people it was called the Great Depression. In 1933 There were many things that got the US into the Great Depression like Companies overproducing, the Stock Market Crash To begin, overproduction was a major cause of the Great Depression. Farmers had been overproducing crops since WW1. The farmers had to grow more than usual to feed the US and the Allies over in Europe because they could not make their own food. After the War the Allies began making their own food again. Although Europe was making their own food again US farmers kept producing more than they needed
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Part of the Stock Market Crash was Stock Speculation. Stock Speculation is buying Stocks always thinking you will make money off the Stock. By the late 1920s about everyone who made a good income had stocks. Stocks were an easy way for people to make money. But people were not safe from false information about the stocks they were buying. Like credit buying on margin was invented. Buying on margin is paying a small amount on a stock and borrowing the rest from broekers. Broekers set margin limits like 20% meaning that the investors have 20% of their money invested. If stocks prices raised would pay back the money they borrowed and keep their original 20% and the profit. It was easy money so many people invested. Stock prices rose to where they were eventually worth more than there actually worth. When the Stock Market was very high it was called a bull market. In 1929 the Stock Market was a bull market. But if Stocks went down the investor would not be able to pay off the broeker and would have to somehow find more money to pay them off. The Stock Market had crashed and this happened to many people. Several million people lost all the money they had put into the Stock Market (“Causes of the Great
Part of the Stock Market Crash was Stock Speculation. Stock Speculation is buying Stocks always thinking you will make money off the Stock. By the late 1920s about everyone who made a good income had stocks. Stocks were an easy way for people to make money. But people were not safe from false information about the stocks they were buying. Like credit buying on margin was invented. Buying on margin is paying a small amount on a stock and borrowing the rest from broekers. Broekers set margin limits like 20% meaning that the investors have 20% of their money invested. If stocks prices raised would pay back the money they borrowed and keep their original 20% and the profit. It was easy money so many people invested. Stock prices rose to where they were eventually worth more than there actually worth. When the Stock Market was very high it was called a bull market. In 1929 the Stock Market was a bull market. But if Stocks went down the investor would not be able to pay off the broeker and would have to somehow find more money to pay them off. The Stock Market had crashed and this happened to many people. Several million people lost all the money they had put into the Stock Market (“Causes of the Great