What were the main causes of the Great Depression? The Great Depression, which began in 1929, was a financial crisis that had a seriously negative impact on the whole of the western world. Although it is agreed by most historians that the crisis began in 1929 with the Wall Street Crash, it was not until the 1930s that the crisis took its toll on the majority of the countries involved. This period would last until 1941, when the United States began preparations to enter the Second World War. Many people believe that the main cause of the Depression was the Wall Street Crash however this is far from the truth.
The "easy credit "of the 1920s.these people were allowed to borrow money they couldn't pay back. During this period there was a very high increase in the amount of bank loans and credit. The lack of government control meant people were free to purchase on credit which led more people to purchasing stocks on credit The banks as well were also at fault because they would loan money to people who didn't have money and wanted to speculate on the stock market and buy on the margin so when the stock market crashed, the people could not pay off their loans and the banks had no money to give the people who deposited money. This led to banks being forced to close down and families losing their life savings The social impacts of the Wall Street crash were a nightmare for those who had no hand in its causes. Traders had a reduced amount of demand because no one wanted their goods, 18 000 farmers at the end of 1932 had lost everything and had gone bankrupt, this statistic also lines up with the fact that 1 in 20 farmers were evicted .
This is because the government printed out even more money so that he could pay off the reparations. However, as the government printed out more money, the money lost it’s value, so it basically became worthless. And because of this, the prices for food became too high. Most people that were unemployed and were now, homeless, could not pay this amount so they starved. When Stresemann took control, the Hyperinflation was a major crisis in Germany.
During the 1930s over 9,000 banks failed. People lost their savings due to the bank deposits being uninsured. Banks that hadn’t failed almost completely stopped giving out loans. One event that led to the Great Depression that was not a direct cause was the Dust Bowl that occurred in the Mississippi Valley was so large that people could not pay their taxes or other debt they had, which caused them to have to sell their farms for no profit for themselves. People also stopped purchasing items which led to a reduction in the number of items being made and a cutback on staff.
These foreclosed properties were called the “Real Estate – owned” (RE-O) property. These were a big problem for the banks as they had to pay the taxes because they were involved in the development business. They were supposed to sell the real estate – owned property in order to get the investment back, if they were unable to do so the regulator would drop the price which led to the fall in the profits and ultimately lead to their closure. So these were a serious threat to the S&Ls. This affected the powerful people such as owners and administrative due to which they took these RE-O properties off the books.
For example, the people who spend the most money on lotteries are the people with less money. Third, “states lose money on the deal because supply companies are expensive. Usually, 5% or so of the lottery costs goes to a supplier. So the State actually loses money on the deal. But, the State government picks up a lot of money.” (Thompson Easy Money ).
Irrational investors were so blind from the euphoria sweeping the nation from frequency of the dot com companies emerging. Furthermore we can this on the graph below. The graph below shows us the relationship between the index value and the trailing year dividend per share. By examining the period we spoke about above, we can see the soaring spikes and falls. We can see that after the crash, we have a trend of slow steady increases generating.
The relationship of acute crisis in agriculture and the industrial crisis has made the economic depression worse, famers were angry with their government. The banks looked shaky and depositors wanted their money, making them shakier still, and in time many were forced to close. Factories and businesses got rid of large numbers of employees or closed down altogether, and soon there was no money to buy the farmer’s products or anything else and this causes people is inability to buy Agricultural products. “Farmers struggled with low prices all through the 1920s." Desperate bankers called in their loans, but farmers had no money to pay them and foreclosures and bankruptcy sales became daily events.
Many people lost jobs and had to pay higher taxes on land. Unfair methods of collecting revenue were introduced, leading to deep resentment. No money meant more chances of crop failures as the farmers weren’t able to afford crops of certain quality. Although everyone was impacted, the soldiers were impacted the most. Landowners also lost land due to the zamindari system (introduced by the British), which said that zamindars were the landowners and that they had to collect the rent from peasants.
Are pennies worth minting? Many people believe they’re a waste of money, but some people believe that they’re still worth minting. Pennies should not be minted for many reasons such as, the penny costs more money to make then the penny has in value.Another reason is that pennies are a severe waste in time such as people often pay with pennies as a practical joke, which means hard working employees often have to spend the time to count those pennies. The final reason is because the penny is losing the government money. All in all the penny should not be printed anymore because they cost more to make then they have value, then they are a waste of time as in counting the, and finally reason is that pennies are losing the government money.