Causes of the Great Depression

Pre - Ap US History

Black Tueday

A record was set on October 24th, Black Thursday, for the most shares traded which was 12,894,650. The stock market crashed October 29th, Black Tuesday, and 16,410,030 shares traded which set the new record again, losing billions of dollars, investors, and stock tickers. United States prices continued to drop and putting America in a Great Depression. The stock market was worth only 20% of their value during the summer of 1929. Other effects of the stock market crash were unemployment rose to 25%, wages fell 42%, economic growth fell 50%, and world trade plummeted 65%. The stock market crash wasn't the only reason that United States went through a Great Depression.
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Bank Failure

Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus 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. This exacerbated the situation leading to less and less expenditures. Bankers capitalized irresponsibly on the bull market, by the time the stock market crashed the money dissapeared. Hundreds of banks failed and that then caused even more panic and put people in the position to withdraw their private savings.
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Overproduction in factories was a major factor in causing the Great Depression. Factories produced a large amount of consumer goods to meet with the demand. Output was extremely high but workers wages remained almost the exactly the same, not allowing the demand to grow because no one could afford what factories were putting out. The price of goods fell to rock bottom, creating a large number of products people still couldn't afford; especially after the stock market crash.

Overproduction on farms was also played a large part in the Great Depression. The large amount of debt that farmers had forced them to plant large quantities of wheat and other cash crops. It created a surplus of product, once again driving prices farther down than before. Farmers were forced to plant even more, eventually leading to what is known as the dust bowl.

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