Great Depression

Causes of The Great Depression

On Sept 4 1929, the stock merchandiseplace hit an all time high. All the banks in the States were heavily sited in stocks, and individual investors borrowed on margin to invest in stocks. On October 29, 1929 the stock market place crashed. This simple display case began the worst decade in history, The Great Depression. Even though the stock market crash was the inception of the great feeling, there are some(prenominal) events that lead up to it and other factors that c grasshe the economy into a deeper depression.
Since our country was running on phony prosperity, it was going to eventually lead up to a depression if it was not fixed. For instance, our country had overdependence on mass production. Consumers were spending more(prenominal) property then they actually had. Another is a lot of companies were dependent on Welfare capitalism which was providing welfare- standardised services to employees such as offering higher pay and non-monetary compensation like health care, housing and pensions. Also there was overproduction in textiles, farming was high, and automobile sales was also on the formulate as well.
The next cause was the events leading up to why the stock market crashed. For example, there was low margin requirements.



At that time you exactly had to put down 10% of the money to purchase stocks, so if you wanted to buy $10,000 worth of stocks you only had to put down $1000. The next thing that brought the stock market to crash was poor banking structures. There were few federal restrictions on start-up capital requirements for new banks. As a result many banks were pretty much highly insolvent and when they invested heavily in the stock market, the results proved to be devastating once the market crashed. Another factor was the Federal Reserve aggressively raised interest rates on broker loans to preserve the sawbuck but it didnt work. Instead, this further restricted the availability of money for businesses causing more bankruptcies.
The next cause was the banking...If you want to come out a full essay, order it on our website: Orderessay



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