Great Depression Causes- Caroline S.

Dear Robby,

The Great Depression was the worst economic depression in US History. It didn’t happen overnight, it was caused by a whole bunch of factors including, the stock market crash, bank failures and lastly, farm and industries were failing.  I think this era changed American hugely and helped it grow over the years.

The Stock Market crash in 1929, in late October, right before Halloween, was referred to as the spark that started the Great Depression. This happened at the end of World War I and started a new era in America. It was a time when inventions such as the airplane and radio made anything seem possible. Now you are probably wondering what the Stock market was. The stock market was when a normal person can a part of a company at a certain price and sell it hopefully when it is worth more. Millions of people from all over the world who owned stocks waited helplessly as stock values crashed. The stock market downturn continued for at least three years. By the time it was over, the average value of companies had dropped almost 90 percent. This affected Americans from all over hugely.

The next biggest factor was Bank Failures. Throughout the 1930’s over 9,000 banks failed. Many people lost their savings and bank deposits did not get the money back. So, as banks failed more and more people continued to lost their savings. The few surviving banks were very concerned with being able to go on. Since the economy was in such a bad economic states many banks hesitated giving out loans to people, scared that they would never play them back the money. This made the situation more serve because it led to less and less money for the banks. So, as the banks hesitated they were not getting any money for that so they went bankrupt.

Lastly, the farm and industries in the 20th century was failing. Farmers began to lose farms as banks rule out on mortgages. Basically everything to do with farms and industries declined in this era. This caused many problems for farmers and industry workers; they started getting laid off and not being able to work anymore.

As you can tell the Great Depression was a bad time in American and almost everyone suffered from it. Today we are still trying to recover from this time in history.

Sincerely,

Caroline Short

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