Causes of The Great Depression
• In the 1920s, speculations lead a large amount of people to buy stocks with loaned money. These people used stocks as guarantee for buying more stocks. Broker's loans started off as under $5 million in mid-1928 to about $850 million in the fall of 1929. The stock market’s big boom was unsteady, because it was a system relying on loaned money and dishonest hopefulness. Investors eventually lost confidence and the stock market collapsed and took them with it.
•A short sighted government economic policy was a factor that lead to the Great Depression. Politicians thought that business was mandatory for America. So, the government did not put any money in the stocks. The government made laws that protected American industries but hurt farmers and traders.
•The economy was not stable and wealth was varied. There was a couple families who invested their
money on American goods and the demand was greater. Prices skyrocketed up and Americans could not afford anything.
•Stock Market crash of 1929