There many factors that caused the crash of 1929 and the Great Depression. First, in September of 1929 the DJIA, Dow Jones Industrial Average, had reached an all time high. Consequently, people started buying stocks. The problem was that if people didn't have enough money to buy stocks they would take loans from the banks. However, in October, the DJIA fell and people started to panic. They sold all their stocks and businesses lost their profits. Now everyone who had loans from the bank couldn't pay them back. Once this happened it was like a ripple effect.
First, since businesses were losing money, they had to cut production. This meant that they also had to cut their work force. Next, the banks were running out of money and had to close. Lastly, the government had to help all the unemployed people and soon most people were relying on social welfare. Event after event caused the crash of 1929 and the Great Depression.
Personally, I think that if everyone, investors, businesses, the government, and banks, were more cautious in the beginning none of this would have happened.
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Jessica Reed
11/5/2009 01:16:37 am
My resource for my first post was: My class notes
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Arjun Rajesh
11/5/2009 05:31:00 am
The crash had a large list of causes. First there was a drought issue. Farmers were unable to provide crops for everyone because of the droughts. Therefore food prices went up and less people were able to afford them. Since the farmers weren't producing sufficient amounts they weren't making very much money. A lot of people were farmers and many had to sell thier homes. Also banks were failing. Since they were failing they were unable to give loans so people couldn't start any businesses so no new jobs were coming around while many were being lost. This led to the stock market crash which led to the great deppresion.
There were many reasons for the Great Crash. The main reason was the Dow Jones epidemic. The DJIA stock reached a very high number.Then once everyone started buying the DJIA stocks, it dropped, unexpectedly. Ehen it did drop, everyone freaked out and sold their stocks. However, when they sold their stocks, businesses started losing their profits. And since the businesses were losing profits, they had to cut back on production, meaning fire workers. Sop the more poeple they fired, the more people there were unemployed. And then the unemployed started not being about to pay rent and loan back money from the bank, starting the great depression.
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Molly Buring
11/5/2009 09:14:41 am
my sources were: class notes my dad
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Arjun Rajesh
11/21/2009 07:31:09 am
I think that careless people were the cause of the Great Depression. I think that the banks were careless and lended money to people with poor credibility. The people could not pay the money back to the banks and the banks lost a whole lot of money. Without money the banks failed and laid off many people. This had a chain reaction because people (even the ones with good credibility rates) could get loans from the bank. Since people couldn't get loans very few people were starting new businesses. That meant that many jobs were closing off and none were opening up so too many were unemployed.
http://www.gusmorino.com/pag3/greatdepression/index.html class discussions
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