What Caused The Great Depression

The Great Depression was a period of time when the majority of the population was unemployed which caused the United States economy to plummet. People’s personal income decreased dramatically, the profit people and companies made decreased, the governments tax revenue decreased as well, the price of things dropped because the value and worth of things dropped as well. During this time many people lost their homes due to foreclosure because they did not have a steady source of income to be able to pay off their debts. The majority of families decided to go on the road and try to find a place that was looking for workers so they can settle down and have a place to live. The Depression lasted over a decade and has been the worst economic depression

The stock market was so unregulated that many people started margin buying which meant that customers borrowed up to 75 percent of the purchase price of stocks, in result that lured many speculators and less creditworthy investors into the stock market. The Federal Reserve warned banks not to lend money because many of the people investing would not be able to pay back their debts if the prices dropped but people didn’t listen. The stock market began falling in early September but the investors still ignored the warning. Between October 24, 1929 and October 29, 1929 more than 28 million shares changed hands in frantic trading. It is then that investors found themselves in a lot of debt so they began trying to sell their stocks but no one was willing to buy any stocks at any

Due to the stock market crash some banks were forced to close their doors without warning and without letting people withdraw their money. When the doors closed the money people had deposited was lost resulting in the loss of trust the public had with banks so they were no longer depositing money which meant that the banks did not have much money to lend out or invest. This resulted in the closure of even more banks because they did not have any more funds. The public not only stopped storing their money in banks but also stopped spending and started saving their money instead because they were unsure of the future that lied ahead of them. They stopped buying manufactured products which resulted in the loss of profits from those companies and eventually forced them to stop production and close down and many workers lost their jobs increasing the unemployment rate. This was the beginning of a cycle where less public spending meant less company revenue, which also resulted in the loss of jobs for the current employees of those companies resulting in a high rate of unemployment, and without steady jobs spending was then again affected because of lower family