The Depression Case

The Great Depression was the WORST economic time period in the history of the United States. Everyone was affected by the depression even though it started in the U.S. Those who suffered the worse were not even in the country, they were from other countries. Such as Europe, Germany, and Britain. No one knows why we had such a bad economy; it’s still up for debate. But there are people that have agreed on certain reasons. The main event acknowledged is the stock crash, distribution of wealth, and the Smoot-Hawley Tariff.

In the 1920s the states were up, it was growing rapidly; I mean why not? It was considered a technological era. There was money to spend, the economy was doing well so money was being spent, and life was good for most people. People were buying and using new things such as the radio, telephone and automobiles. People from different classes, people with not much money at all were making investments. The stock prices rose higher with each new investment. Most people invested all of their savings in the stock market, wishing, hoping to make a come up on money.

People who didn’t have enough money to invest on stock would, borrow from other people, or take out loans from a bank. In the end billions of dollars were spent on the stock market. A reason for the stock market crash was due to margin buying. People who invested paid approximately ten percent of the actual value of the stock and buying the rest of it in installments. The stock market wasn’t able to hold or handle such a great amount of money.

All the money that was given between the rich and middle class created a very huge gap. Our economy produced more goods than people could buy because most of them didn’t have the money to spend. They spent most of it investing on stocks. Because of the stock market crash people every different class stopped buying things. This problem caused a decrease in the number of items made and that lead to people getting fired from their jobs. So many people lost their jobs because companies weren’t making enough money to pay their employees. Therefore, they had to let certain people go.

All because people were out of work they were not able to keep up with paying things they bought through installment plans. With each passing day more and more of the inventory from companies were accumulating.