ipl-logo

What Caused The Great Depression Essay

1583 Words7 Pages

Cooper Shields
Mr. Burton
US History
March 3, 2023

Causes of The Great Depression
During the 1920s, the economy was thriving more than ever, and because of this, Americans had more money than usual. This led to most Americans starting to invest; they would obtain a loan from a bank and use that money to help them buy stocks. At the time, this seemed very positive, but the economy soon took a turn for the worse, the beginning of the Great Depression, and the negative effects of the American’s actions started to show. While there were many causes for the great depression, and many are still argued today, the three most crucial causes were the stock market crash, bank failures, and overproduction. Many historians argue about what the most consequential …show more content…

During World War I, millions of men were sent to war; some of those men were farmers who were forced to leave behind their farms to fight for their country. Because of this the demand for food and farmers went up, many of the farmers who were not serving the country saw this as an opportunity to make more money. These farmers went to the bank and collected a loan, thinking that “they would make enough money to pay the banks back quickly.” This quotation shows that these farmers who were taking out loans thought that by buying more land and equipment they would be able to make more money because there was a large demand for food and by buying more land they would be producing more food and selling more while prices are high, but soon after they bought this land the farmers who had been sent off to war came back and the demand for food plummeted because now there was too much food being produced. Now that farmers had come back from war and others had bought more land to meet the previous demand, there was much more food being produced, which caused the food prices to go much lower than they had been before. This left a lot of farmers with large loans and very minimal pay to pay them off, so the majority of farmers were forced deeper into debt. The entire nation was affected by overproduction, not only the rural areas but also the major cities. During the 1920s, people were able to buy things that they …show more content…

This is because all of those causes impacted each other and combined to create a greater crisis, the Great

Show More
Related

  • Fdr's Economic Problems

    734 Words  | 3 Pages

    The critical problems in the late 1920’s, threatening american economy was the older industries such as textiles, steel, and railroads, which were basic to the fundamental well-being of the economy, were barely profitable. Crop prices dropped, americans thought the nation would continue to prosper under Republican leadership. The bottom fell out of the market and the nation's confidence, and half of the banks failed. The causes of the stock market crashed and the Great Depression made the collapse of the economy occur more quickly and the depression worse than it could have been. Many were out of a job, and others experienced pay cuts and reduced hours.

    Read More

  • Great Depression Dbq

    174 Words  | 1 Pages

    The great depression in the US, which began in 1929, and ended in 1938 was caused by many different things all happening at the same time in the economy. The wall street crash in October 1929 was one of the main causes, when the stock markets crashed. This was caused by many things, but the main reason for it was a deflation (which is an event where the general level of prices in an economy are reduced) On October 24th (black Thursday), share prices dropped by 14 billion dollars in a day, and more than 30 billion in a week. This forced many of the banks to close, due to them investing their client’s savings in the stock market.

    Read More

  • How Did Ww1 Affect The Economy

    525 Words  | 3 Pages

    The newly paved roads made transport from farm to market easier, but the oversupply worsened because of easy access. The supply and demand imbalance caused farmers to not get the price they needed for their crops; cotton would sell for 35ȼ/lb, but it plunged to 6ȼ/lb. This caused farmers to lose income and made it so they could not pay back loans from the bank, therefore causing banks to close and everyone in the area lost their

    Read More

  • Great Depression Dbq

    509 Words  | 3 Pages

    In the industry, household appliances, cars, and consumer products were purchased by using credit. Production continued rapidly, while very little were able to afford the products produced. Farmers also suffered as they were producing more than what people were consuming. With growing cities and railroad access, farmers were taking advantage of costly but effective strategies. Unfortunately the famers had to pay out more to the distributors and railroads then what they were able to keep.

    Read More

  • How Did The Dust Bowl Affect The Lives Of White Farmers In The 1930's

    866 Words  | 4 Pages

    In the article The Balance, “The farmers could not profit of the little crops that they had due to deflation.” Since they could not profit off their crops they had a very hard time living there lives. There kids sometimes had to drop out of school because their parents could not afford to hire help. This made children lose out on learning time, causing them to have lost a lot of valuable knowledge. On the web page US History, the article about Farmers Lives In The 1930’s, says, “More than one out of five farmers was on financial aid, because they could not make any money by selling their crops.”

    Read More

  • What Caused The Great Depression Dbq

    1228 Words  | 5 Pages

    The Great Depression was a complex event caused by a variety of factors. The six factors of the Run on the Banks, the Stock Market crash, the uneven distribution of wealth, problems for business and industry, problems for farmers, and the overuse of credit all played a role in the start of the Great Depression. All of these factors were an important factor in helping start the Great Depression. However, the overuse of credit was the most important factor of them all because it led to people relying on loans, too many payments for the consumer to adequately keep up with, and the economy eventually drying up once the influx of money stopped.

    Read More

  • Causes Of The Great Depression Dbq

    1004 Words  | 5 Pages

    From 1929 to 1939, the world experienced a global economic crisis known as the Great Depression. It was the twentieth century's lengthiest, most intense, and most widespread depression, and its effects were felt across the world. While there is controversy over what started it, the stock market crash, the banking crisis, and overproduction all contributed to the Great Depression. The stock market was growing in the 1920s, and many people regarded it as a rapid way to get rich.

    Read More

  • Discuss The Effects Of The Transcontinental Railroad

    849 Words  | 4 Pages

    Many of these Americans became farmers anticipating the high profit from the rising value of land and crops. So, during boom times, farmers rushed into debt to get more land and better farm equipment. They were excited about cash crops, land speculation, borrowed money, and new technology. Though, these individuals were at a disadvantage dealing with the large companies that arranged their credit, supplied them with machinery, and marketed their products. So, farmers tried cooperation where agrarian parties made Granger laws to regulate grain elevators, fix the maximum railroad rates, and prohibit the discrimination of small and short hauled shippers.

    Read More

  • Why Is Consumerism So Important In The 1920s

    2141 Words  | 9 Pages

    In 1929, the Federal Reserve Board dramatically increased interest rates to slow inflation, which ended up being a huge mistake. This increase heavily impacted Americans’ spending habits, and punished their reliance on credit. This led the US economy into a standstill, where the demand for goods was low, but companies had many things to sell leftover from the period of high consumerism. Unsound Banking and investing practices were also a major cause of the Great Depression. Margin investing was the practice of getting a loan from the stock market to be able to invest more money.

    Read More

  • What Caused The Great Depression Dbq Essay

    726 Words  | 3 Pages

    In 1929, the U.S. was hit with the worst economic crisis in the history of the country, the Great Depression. The Great Depression left millions of people unemployed and cost millions their life's savings. The Depression lasted for ten long years for the American people. Since the Great Depression ended, people have studied it, trying to figure out what happened that started it all. The problem was, in fact, the poor economic habits of the people at the time, such as speculation, income maldistribution, and overproduction.

    Read More

  • Farmers's Response To Industrialization In The Gilded Age

    1456 Words  | 6 Pages

    Most farmers struggled to make a living due to key issues. There was often a high tax on railroads which had cut a large profit from the farmers. The farmers had no other option other than the railroad since the farmers were often very far off westward in the Great Plains, while the market with a large population was still in eastern cities like New York. Likewise farmers had to pay a middle man in the East to sell their commodities in the East, because the poor farmers were unable to travel all the way to the East to sell their products then come back to start farming for the next year. Surprisingly, farmers were often detrimental to themselves due to

    Read More

  • What Are The Underlying Causes Of The Great Depression

    585 Words  | 3 Pages

    America had experienced other depressions or “panics,” but none were like the Great Depression. The Great Depression began on October 29, 1929, Black Tuesday, with the stock market crashing. Most people believe that the cause of the Great Depression was the stock market crashing. Although that is what triggered the Great Depression there were many underlying causes that lead up to the stock market crashing. Some of the underlying causes include under-consumption/over-production, uneven distribution of wealth, loose banking and corporate regulations, tariffs policies, and the stock market.

    Read More

  • Analyze The Effects Of The Progressive Era

    690 Words  | 3 Pages

    The agriculture remained in depressed conditions from 1923-1929 (Mcelvaine, 2004). Another issue faced and that was a cause for depression was finance. Although the United States went from a net debtor to the world's largest creditor, war debts and reparations were continuing irritant to the international economy in the twenties (Mcelvaine, 2004). The United States was considered banker or creditor-in-chief, which was the role of Great Britain previously, but they were not prepared for it and the leaders were wanting more exported than imported and this was incompatible with America's assumption of the position of the world's leading lender, because the other countries would have to sellmore to the United States than they purchased in order for them to repay the debt they owed the United States creditors (Mcelvaine, 2004). The stock market crash was not the cause of the Great Depression, but it did contribute to it.

    Read More

  • What Caused The Great Depression Research Paper

    780 Words  | 4 Pages

    There were a variety of causes that caused the Great Depression, but the main cause that started it was a decrease in spending. This led to production decrease because manufacturers and merchandisers did not want to have unused items just sitting on the shelves. In October of 1929 the stock market crashed. The United States stock prices had reached levels that could not be justified by sensible predictions of future earnings. The results of this were catastrophic.

    Read More

  • Causes Of The Great Depression Essay

    750 Words  | 3 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.

    Read More

More about What Caused The Great Depression Essay

Open Document