Credit Structure And Fall Of The Great Depression

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The economic collapse know to many generations as the Great Depression, left families in financial despair, many lived off of food stamps and careful savings. The continuous reactions of financial ruins began in the autumn of 1929. However, the more influential factors such as lack of industrial diversification, poor credit structure, and unstable international debt structure resulted in the Great Depression. In essence, the Great Depression was an avoidable struggle for the American people that would last approximately ten years.
Lack of diversification, the distribution of spending over several industries, aided the fall of the economy. Because the economy of the 1920s relied so heavily on very few industries such as construction and automobile
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The combination of the low consumer demand and new technologies that allowed farmers to produce more resulting in overproduction meant that the crops would be sold much cheaper than usual. Agricultural production was to great for the Markets to handle, the farmers could not earn enough profit to compensate for the price of production. The farmers, now deep in debt from the newer technology like tractors as well as land purchases, could not pay off their loans because they did not make a decent income off the low crop prices. The unpaid loans of the farmers led to the failures of small banks. Larger banks were in trouble too; many banks gave loans and recklessly invested in the stock market. The loans were never to be paid off and the stock market crashed, leaving some banks to go bankrupt. Others, made matters worse by calling loans due and shortening credit contracts that the borrowers couldn’t …show more content…
An average of 20% of the American workforce saw themselves unemployed; the others mostly found themselves with less hours and pay. Had the American government acted responsibly, the severe depression could have been prevented. The Great Depression could have been avoided; changes in industrial wealth distribution, credit structure and the dealing of the unstable international debt structure would have secured America from the Great

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