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Causes Of The Great Depression Essay

750 Words3 Pages

Nishat kazi (Muniya) 11th grade The Great Depression was one of the worst downturn of economy in the history that took place during the 1930s.It had a catastrophic effect in countries on both rich and poor.Though there are a lot of causes behind the Great Depression,the main three causes were-1.Bank failure 2.Stock market crash 3.laissez faire. The first cause of Great Depression was bank failure.It was one of the main causes of the Great Depression.Throughout the 1930s over 9000 banks failed.In 1920s there were a lot of banks.At the beginning of 20s Nebraska had a lot of people.Every town had banks who were trying to take in deposits and loan out money to farmers and businesses.As the economic depression became deeper in the early 30s and as farmers had less money to spend in, town banks began to fail at an alarming rate.And the bank which were not damaged by the agricultural crisis competed with each other.To get more deposits from the peoples the banks raised their interest rate.And to cover up the expense the banks have to get the money from the interests they get on loans.The banks also gave loans to the stock market brokers and as the stock markets failed the bank couldn’t get the moneys back as a result they failed.And this bank failure along the stock market crash caused a great harm to the Us economy. During the mid 1920s the stock market went through

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