What Are The Causes Of The Great Depression

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Great Depression
During the 1920s the stock market boomed and many individuals prospered. The prosperity came from borrowed money and also from buying stock on margin. As a result, on October 29, 1929, known to us as Black Friday, the stock market crashed, which sent Wall Street into a panic and wiped out millions of investors.
The Great Depression (1929-1939) was the deepest and longest-lasting economic downturn in the history of the Western industrialized world. “One of the major causes of the Great Depression was overproduction, a situation in which the supply of manufactured goods exceeds the demand.” Throughout the 1930s over 5,500 banks failed. Bank deposits were uninsured and as banks failed, people simply lost their savings. “Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans.” In this case, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and a reduction in the workforce. “As people lost their jobs, they were unable to keep u...

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