What Caused The Great Depression

Former President Calvin Coolidge had once said in 1932, “In other periods of depression, it has always been possible to see some things which were solid and upon which you could base hope, but as I look about, I now see nothing to give ground to hope—nothing of man." This quote shows that the Great Depression was not going to be similar to any depression that had occurred and the recovery was going to be much more difficult. It also shows how discouraging the Great Depression was because everything was in ruins and there were no silver linings at the time. The uneven distribution of wealth, corporations/businesses Structures, plight of farmers ,and the stock market crash had all led to the Great Depression.

The uneven distribution of wealth
Firstly, in the quote, “Key basic industries, such as railroads, textiles, and steel had barely had a profit. Railroads lost business to new forms of transportation (trucks, buses, and private automobiles, for instance)” (McDougal Littell). It explains that many businesses had failed during the Great Depression, even the industries that were doing very well. There was a “domino effect” where if one industry had failed, then another industry that had relied on or worked with the failed industry would fail as well because they can no longer work together to help one another succeed. Secondly, according to class discussions, businesses that had invested in stocks had to fire many workers due to the fact that businesses were losing money because their stocks that they invested in had failed. Businesses had to to fire workers so businesses could have more money have themselves, rather than paying employees. Lastly, the product of the nation’s goods were significantly decreased, due to underconsumption during the Great Depression as explained in the quote, “Between 1929 and 1932, the gross national product- the nation’s total output of goods and services- was cut nearly in half, from $104 billion to $59 billion” (McDougal Littell). people were not buying any goods that were already produced because the majority of
First of all, many people had over speculated within the stocks, which had ultimately led to their own downfall due to the risks present. In the quote, “People were engaging in speculation- that is, they bought stocks and bonds on the chance of a quick profit, while ignoring the risks” (McDougal Littell). it shows that people were not careful with their money and did not think about the risks that may occur, such as the stock they were investing in failing. In addition, people were buying on margin and believed that they had endless amounts of money, when in fact they didn’t, because they did not think about the future when they were expected to pay the bank back when buying on margin. The quote, “Many began buying on margin- paying a small percentage of a stock’s price as a down payment and borrowing the rest. With easy money to investors, the unrestrained buying and selling fueled the market’s upward spiral” (McDougal Littell). shows that people were careless about their money and credit because they did not think about when they had to pay back the banks at the time of investing in stocks by using borrowed money. Lastly, the government did not do much to prevent the over speculation of people who were wildly investing in stocks. This quote ”The government did little to discourage such buying or to regulate the market. In reality, these