The Great Depression was a time of great economic hardship in the United States. Many people were jobless, hungry, homeless, and broke during The Great Depression. Many experts believed that the Stock Market Crash of October 1929 was one of the major reasons why The Great Depression began, but there are many more causes that lead to The Great Depression. Some of these causes include consumer borrowing, bank failures, and cuts in production. These causes had destructive effects that brought the United States economy to a detrimental condition.
One major cause of The Great Depression is the Stock Market Crash of 1929. The United States was in a great economic position between 1921 and 1929. The Stock Market had grown by 600% with the Dow Jones Industrial Average rising from 63 points to 38 points. ( ). During the end of 1929, the economy began to slow down. At the end of October, several stock owners began to sell massive amounts of …show more content…
This ultimately lead to many banks inoperable and failing. People in the 1920s believed that they could buy many products like televisions and automobiles by using credit. A lot of these people could not afford some of these merchandise, so they went to the banks to get the money. Consequently, banks gladly loaned money to individuals who wanted these luxuries, so these loans resulted in a lot of debt that many people could not pay back. Therefore, the bank loans were unpaid, and this caused many banks to run out of money. As a result, many banks started to use their customers' personal savings accounts to pay back people who wanted to withdraw their money from the bank. This decision caused a large number of individuals to lose their money. All the money that these people had saved was gone, so they did not have any money left in their accounts. Obviously, consumer borrowing and bank failures drove many Americans to
One major cause of The Great Depression is the Stock Market Crash of 1929. The United States was in a great economic position between 1921 and 1929. The Stock Market had grown by 600% with the Dow Jones Industrial Average rising from 63 points to 38 points. ( ). During the end of 1929, the economy began to slow down. At the end of October, several stock owners began to sell massive amounts of …show more content…
This ultimately lead to many banks inoperable and failing. People in the 1920s believed that they could buy many products like televisions and automobiles by using credit. A lot of these people could not afford some of these merchandise, so they went to the banks to get the money. Consequently, banks gladly loaned money to individuals who wanted these luxuries, so these loans resulted in a lot of debt that many people could not pay back. Therefore, the bank loans were unpaid, and this caused many banks to run out of money. As a result, many banks started to use their customers' personal savings accounts to pay back people who wanted to withdraw their money from the bank. This decision caused a large number of individuals to lose their money. All the money that these people had saved was gone, so they did not have any money left in their accounts. Obviously, consumer borrowing and bank failures drove many Americans to