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What Caused The Great Depression Essay

1583 Words7 Pages

Cooper Shields
Mr. Burton
US History
March 3, 2023

Causes of The Great Depression
During the 1920s, the economy was thriving more than ever, and because of this, Americans had more money than usual. This led to most Americans starting to invest; they would obtain a loan from a bank and use that money to help them buy stocks. At the time, this seemed very positive, but the economy soon took a turn for the worse, the beginning of the Great Depression, and the negative effects of the American’s actions started to show. While there were many causes for the great depression, and many are still argued today, the three most crucial causes were the stock market crash, bank failures, and overproduction. Many historians argue about what the most consequential …show more content…

During World War I, millions of men were sent to war; some of those men were farmers who were forced to leave behind their farms to fight for their country. Because of this the demand for food and farmers went up, many of the farmers who were not serving the country saw this as an opportunity to make more money. These farmers went to the bank and collected a loan, thinking that “they would make enough money to pay the banks back quickly.” This quotation shows that these farmers who were taking out loans thought that by buying more land and equipment they would be able to make more money because there was a large demand for food and by buying more land they would be producing more food and selling more while prices are high, but soon after they bought this land the farmers who had been sent off to war came back and the demand for food plummeted because now there was too much food being produced. Now that farmers had come back from war and others had bought more land to meet the previous demand, there was much more food being produced, which caused the food prices to go much lower than they had been before. This left a lot of farmers with large loans and very minimal pay to pay them off, so the majority of farmers were forced deeper into debt. The entire nation was affected by overproduction, not only the rural areas but also the major cities. During the 1920s, people were able to buy things that they …show more content…

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