1929 Dbq

In the 1930s, America faced a large economic downfall. Citizens thought they were financially stable until they all unfortunately got a reality check when everyone began losing money, jobs and homes. All of the causes can be seen as a chain reaction. Credit was definitely a negative impact on the economy. People would buy things and pay for the items in the future. Consequently, this method of purchasing goods became a huge problem because some buyers were unable to repay the lender, putting them in debt and hurting businesses. Money was not being used responsibly during this time period leading to the Stock Market Crash in 1929. There were so many events and foolish actions that people consider as causes of the worst economic downturn. Speculation,

Stock buyers risked their money in hopes of gaining money. People would buy shares not even knowing if the company was actually making a profit. Problems started to arise when debt was no longer considered shameful. William E. Leuchtenberg wrote, “...consumers bought goods on installment at a rate faster than their income was expanding” (Doc 6). They could not keep up with the amount of commodities they were wasting their money on. The excessive spending came to a breaking point when investors traded about sixteen million shares on the New York Stock Exchange in all but one day. Billions of dollars went down the drain in result of the trades and thousands of investors went bankrupt. Speculators got a rude awakening once they lost all of their money in hopes of gaining more. Harry J. Carmen considers speculation as “the final development that set the stage for the collapse of American prosperity” (Doc 5). So much chaos happened in so little time due to speculation and that was just one reason behind the economy collapsing. Nevertheless, there are so many other factors. It is almost as if the roots of the Great Depression were a domino effect. Gambling on stocks was just the

They produced more than what people were capable of buying which then led to countless layoffs. Elmer Davis stated that, “...when people had bought all they could afford they stopped buying” (Doc 10). The “roaring twenties” negatively impacted the common sense of Americans. The parties and the impulsive purchases warped their vision and put a large percentile into debt. Owners were continuously losing money under the circumstances of customers no longer buying products. It was too expensive to pay workers and buy materials for their items all at once, considering they were not getting enough buyers that were willing to pay. A sketch from St. Paul Daily News shows a man being booted out of a barn with eggs. The eggs represent prices for certain commodities and they are being cracked on the ground (Doc 11). This image shows how fast prices and employees were being dropped because of the lack of customers. As a matter of fact, overproduction made it necessary to drop prices but the low prices led to the farmers being unable to repay loans. Farmers and manufacturers could not do their jobs when they kept losing money by doing their jobs. The more they spent on items or food, the more their business suffered. The Great Depression was a lose lose situation for factories and farms since they lost money by overproducing and by dropping prices to fix the