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Great Depression Dbq

881 Words4 Pages

Joshua Youngworth
Mr. Wall
Period 4A
1-13-23
Stock Market Crash and the Great Depression Prior to the Great Depression stocks started to be purchased much more commonly as people assumed they could only gain profit from them. After the stock market crashed in 1929, the Great Depression soon began and the United States fell into a state of financial struggles. The Great Depression was a time where these struggles were common for tons of people all over the country and unemployment rates skyrocketed. The stock market crash caused the Great Depression because families couldn’t pay for anything, businesses started to fail, and banks closed. Due to the stock market crash, families became unable to pay for anything, allowing for the Great Depression …show more content…

Document E says, “Businesses needed to sell stock to raise money to expand. By the mid-1920s only 2 percent of Americans were purchasing stock. But as manufacturing continued to expand, stock prices climbed upward and investors made money.” This quote shows how businesses were relying on stocks to make money and once the market crashed, they lost all the money that they had in the market at the time. Since Businesses were relying on the market, a lot of them weren’t able to survive. This page from Ivestopedia says, “the economy stumbled due to excess production in many industries, creating an oversupply. Essentially, companies could acquire money cheaply due to high share prices and invest in their own production with the requisite optimism.” Also, the same site says, “Companies were forced to dump their products at a loss, and share prices began to falter.” These two quotes explain that the businesses had an overproduction and invested in their own company with optimism that things would be sold. However, companies had to throw away their products for a loss of money, and the stock prices dropped as a result. The businesses starting to rely on stocks, overproduction, and purchasing of their own stocks led to businesses collapsing and the Great Depression

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