In 1927, the whole market entered a time called the bull market. People with little information about the market were investing in enormously large stoke on margin. When the stocks were paid off they began to buy even larger amounts on margin. Lack of financial regulation in banks, easy credit, shrinking demands worldwide , economic ties with employment and tariffs among other countries were the immediate and fundamental causes of the stock market and Great Depression. To many historians many banks failures triggered the great depression. Since a great number of people were speculating in the stock market, when stock markets went down, it meant that everyone's investments and ability to pay back bank loans went down the drain.
During this time the mentality that most banks had was the idea of depositors deposit their money in the bank and get paid interest. The bank then takes the depositor's money and then gives out loans to borrowers, and charge them a higher interest rate .The difference between what banks are getting paid by their borrowers and what the bank pays their depositors would be the money that the bank earns. But, if borrowers lost their money by investing on stocks, and mainly everybody was doing that, then banks are in a
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A lot of supply but not enough demand. An increase in automobiles, but a not enough American workers who could afford it to buy them. Not enough buyers able to pay for crops linked to over production of crops such as, cotton, corn, and wheat which, made crops worthless of even harvesting. Many workers needing jobs, but there isn't enough employers to hire