What Caused The Great Depression Essay

Just as the American people thought they had finally beaten poverty a dilemma resulted in the U.S. economic prosperity reached its peak and is plummeting into a trough.On the year 1929, the Age of Wonderful nonsense came to an end and people suddenly stopped going to nightclubs, dancing, and drinking. The nations income began to decrease and people began lose jobs. At first the stock market was an important but not the most dominant influence. But however, the market became the symbol of the nation's prosperity and an icon of American business culture. Everything was going great the stock prices reached what looked to be a high peak. The market began to slide, but Investors soon realized they were heavily in debt so they started to sell their stocks which led to others doing the same. That was the start of all the panic, everyone started selling but most of them couldn't find buyers. The impact led to bank failures because speculators who had borrowed from banks to buy their stocks could not repay the loans because they could not
Higher productions were followed by a decline in prices as the supply and demand increased. Instead, farmers continued to produce more as prices dropped, forcing them to become loan defaulters that led to banks closure. The situation worsened by the Dust Bowl which even devastated the farmers more. Overproduction in companies resulted to flooding the market that overwhelmed the people who purchased them. As the companies made their products they continued to lie in the market and made more spending and less returns. Installment buying caused people to impulse buy without the money to repay. There was overproduction and consumption was low and profits turned into losses while debts increased. Overproduction could have resulted from company holdings and false increased in sticks to make the stock seem better than it is. (Docs