The Great Depression In The 1920's

The federal government throughout the the 1920’s went through many changes which lead to The Great Depression in the 30’s. One of the foremost causes of the tragic turn of events was, the crash of the stock market. Between the start to end of the 1920’s the stock prices rose five times. This then meant that they had over-inflated prices, and people losing money in the industry. The stock market was a fairly new source that held a position in many homes of Americans. In 1929, the immediate panic affected millions of Americans. Our economy had never seen anything like it, and they were unsure of how to handle the situation. With multitudes of people have a decrease in income, this made the economy take a turn for the worse. Consumers were no

With the reduction of general prices and the impact of of producers who use the input, the economy was struggling to survive. Millions of consumers out of jobs and unable to purchase goods, prices were deflating, and in major fluctuation will affect every citizen. After the stock market crash, nearly 10,000 banks had failed. When banks were first established, they had no type of insurance. People began to pull all of their money out of banks due to their lack of trust, and feeling uneasy about the lack of insurance on their money. With few banks left, they too decided to shut down. They were worried about their survival, and avoided handing out loans at all costs. With practically all the banks shut down, this caused chaos in the economy.

Another root of the problem was, American government recently made addition of credit to the economy during the 20’s. This went on to Americans living a lifestyle that they couldn’t afford, they would buy items to simply look as though they were higher up on the social ladder. With people beginning to create a lifestyle there weren’t financially able to handle, there was extreme downfall in the