Three Causes Of The Great Depression
In the late 1920's and early 1930's the Great Depression arose and effected about 99% of American citizens were endorsed into extreme poverty from purchasing stocks with no experience and letting the stock market fall upon them. Most Americans were forced to sell all of their possessions and led them into extreme poverty. The three causes of the Great Depression are Banks, Overproduction .vs. Under-consumption and Bad Buying.
In the late 1920's to early 30's people were constantly buying stocks thinking that the revenue from the stocks would pay off their loans. The banks had a loan program and lended almost anybody money but when the stock market had crashed, the American citizens who took out loans had no money to pay back the loans since they needed to sell all of their possessions to survive leaving them with no extra money to give to the banks that they owed money too. Because of this most banks failed and were forced to close taking all of their costumer's life savings with them. An average number of 70 banks were closing nationally each year which lead to the poverty and the start of the Great Depression (Ganzel). When banks were lending people loans to invest in the …show more content…
When the stock market crashed, no one was buying these products from the companies and since so many companies had so many products they needed to sell their products to stay in business so these companies had to fire their employees which led to a even larger mass of people into poverty. In document two you can see that this company is getting orders that they cannot fulfill because they do not have enough revenue to make their products in mass quantities (Document 2). In document one you can see that the farmers were in custom to producing large quantities of crops to sell to Europe but once Europe recovered from World War One the farmers had too much products and could not sell them (Document
In the late 1920's to early 30's people were constantly buying stocks thinking that the revenue from the stocks would pay off their loans. The banks had a loan program and lended almost anybody money but when the stock market had crashed, the American citizens who took out loans had no money to pay back the loans since they needed to sell all of their possessions to survive leaving them with no extra money to give to the banks that they owed money too. Because of this most banks failed and were forced to close taking all of their costumer's life savings with them. An average number of 70 banks were closing nationally each year which lead to the poverty and the start of the Great Depression (Ganzel). When banks were lending people loans to invest in the …show more content…
When the stock market crashed, no one was buying these products from the companies and since so many companies had so many products they needed to sell their products to stay in business so these companies had to fire their employees which led to a even larger mass of people into poverty. In document two you can see that this company is getting orders that they cannot fulfill because they do not have enough revenue to make their products in mass quantities (Document 2). In document one you can see that the farmers were in custom to producing large quantities of crops to sell to Europe but once Europe recovered from World War One the farmers had too much products and could not sell them (Document