Great Depression Causes
The Great Depression had many causes. Some of these were: a surplus of goods, the stock market crash and many countries’ reliance on exports, in particular Australia. These causes together created the Great Depression.
The share prices had been increasing very highly in the late 1920’s. Investors buying the shares on margin when they couldn’t afford them caused this. They became millionaires quickly with the high share prices. Car sales slowed, house sales slowed and steel production slowed because there was very little demand for them. Share prices continued to rise. When the prices were unrealistically high, investors lost confidence and rushed to sell off their shares. So many people rushed to sell them off that the ticker was left behind, and prices collapsed. People panicked more when they realised that soon their shares would be worthless and rushed more to sell their shares off. They needed to sell them off, or they couldn’t be able to pay off their debts. The share prices continued to plummet. Prices were so low that Ben Isaacs “had to sell it [the car] for $15” to feed his family. This event was known as the stock market crash.
The surplus of goods around the world was another cause of the Great Depression. A surplus of goods could not be sold and could not find foreign markets. This meant that other countries had trouble buying these goods. This hit farmers hard because as supply should always equal demand, if there is a surplus of goods, the value of the goods goes down. Statistics show that in 1921, Australian farmers’ mortgages amounted to $3 billion, and in 1929, they amounted to $9 billion. A surplus of goods was one of the causes of the Great Depression, because it put a lot of people in further debt.
Another cause of the Great Depression was Australia’s dependence on exports. Australia, prior to the Great Depression, already had a high and increasing overseas bill. It’s prosperity was based on the continued flow of investments into
The share prices had been increasing very highly in the late 1920’s. Investors buying the shares on margin when they couldn’t afford them caused this. They became millionaires quickly with the high share prices. Car sales slowed, house sales slowed and steel production slowed because there was very little demand for them. Share prices continued to rise. When the prices were unrealistically high, investors lost confidence and rushed to sell off their shares. So many people rushed to sell them off that the ticker was left behind, and prices collapsed. People panicked more when they realised that soon their shares would be worthless and rushed more to sell their shares off. They needed to sell them off, or they couldn’t be able to pay off their debts. The share prices continued to plummet. Prices were so low that Ben Isaacs “had to sell it [the car] for $15” to feed his family. This event was known as the stock market crash.
The surplus of goods around the world was another cause of the Great Depression. A surplus of goods could not be sold and could not find foreign markets. This meant that other countries had trouble buying these goods. This hit farmers hard because as supply should always equal demand, if there is a surplus of goods, the value of the goods goes down. Statistics show that in 1921, Australian farmers’ mortgages amounted to $3 billion, and in 1929, they amounted to $9 billion. A surplus of goods was one of the causes of the Great Depression, because it put a lot of people in further debt.
Another cause of the Great Depression was Australia’s dependence on exports. Australia, prior to the Great Depression, already had a high and increasing overseas bill. It’s prosperity was based on the continued flow of investments into