Without the demand from these European countries, the farmers lost a huge amount of sales. The new machinery they had just added to this, as over production meant there goods were produces more than anyone wanted. It lead to bankruptcy as they could not afford to run these machinery and profit fell. Together, they both resulted in arguably the worse outcome for the farmers. There are little other things that became a cause; prohibition meant that grain was less in demand because it was used in the making of alcohol.
Due to this, a global excess of agricultural products, decreased profits and prices. Many farmers could not make money off of their crops, so they also could not pay back loans from the bank. This weakened banks and forced them to close. In addition, American factories were making most of the world’s goods. There were large profits being made, but there was an unequal distribution of wealth, which made the rich, richer and the poor, poorer.
Even though there was an abundance of goods mass produced and at a cheap price because of that, so many people now had no jobs so the goods were not being purchased. Even though, from 1920 to 1929, consumerism and overproduction partially caused the Great Depression, the unequal distribution of wealth and income was the most significant catalyst. From 1920 to 1929 consumerism partially caused the Great Depression due to speculation and installment buying. Speculation is the act of investing in a stock with the hope of a big gain but the risk of a big loss. Many of the investors were sure that the stocks they were going to buy were going to grow, therefore they received big loans that, once the market crashed and all the money was gone, they could never pay b... ... middle of paper ... ...e excessive speculation in the late 1920's kept the stock market artificially high, but inevitably led to the big crash.
Overall, great societies fall because of internal problems such as, unemployment which leaves people begging for money, political corruption that has government officials constantly fighting, and fast expansion making it very difficult for soldiers to be at all of the borders protecting the whole empire. One of the main reasons great societies fall is because of unemployment. Wealthier people owned farms and had slaves work, making their goods cheaper. However, farmers who had freed men that they had to pay could not sell their goods for very cheap, because they needed the money to pay the workers with. Eventually, the farmers couldn’t keep up with the cheap goods and eventually lost their farms leaving them unemployed and the freed men working for them.
This was a whole new way to make a fortune Unlike the Rockefellers and Carnegies of previous decades who built steel mills and dig oil wells. Man like Jesse Livermore, Michael Meehan, Charles E. Mitchell, had came into their fortune buying and selling stock pieces of paper. American was fa... ... middle of paper ... ...sh, which led to the Great Depression of 1929. Consumers did not protect themselves, as a majority of them thought that taking big bank loans was safe. (Scaliger egot Americans defaulted because of the lack of money being circulated.
Workers couldn’t buy goods. Banks made bad loans to people. The banks wanted to expand. But people couldn’t pay for the loans. Before the great depression started, so many people said they couldn’t pay the banks back, which caused the banks to close down.
Truth is, it was a misconception. The Great Depression started because of the problems and the state of balance of the economic that no one knew. (Silverstein, 12-13) After World War 1, Europe was importing crops with low costs, which caused the farmers’ demand to decrease. Followed by the depression, farmers began to produce abundant of goods and were forced to sell the crops on low prices. This caused them to ran out of money and stop farming.
A major cause of the Depression was that the pay of workers did not increase at all. Because of this, they couldn't afford manufactured goods. While the factories were still manufacturing goods, Americans weren't able to afford them and the factories made no money (Drewry and O'connor 559). Another major cause related to farmers. Farmers weren't doing to well because they were producing more crops and farm products than could be sold at high prices.
American goods were not being sold. This resulted in cut-backs in production which meant that there was less employment available so people lost their jobs. Profits being made lessened and so did the value of shares. A lack of regulation in the stock market was also a cause of the great depression. Most shares that were changing hands were done so through borrowed money.
Companies used huge amounts of advertising, but there was no demand for their products, as people's wages were still low, and prices were still high. Normally, America would have exported its surplus to Europe, but because American prices were so high, people in Europe could not afford them either. Also, Europe had put up its own trade tariffs to protect its companies from the American companies. The weaknesses beg... ... middle of paper ... ...le to do, and get paid for. The black Americans had been hit very hard by the depression, but, The New Deal CCC helped the black Americans gain benefits and other Agencies helped them improve the quality of life by improving housing conditions from slums to proper houses.