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What caused the great depression?

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Introduction

What caused the great depression? Introduction During the 1920's in America, people tried their hardest to reach prosperity, they believed in having a nice house, a good job and money for food, but also there were dreams of buying consumer goods. During the economic boom, many people started investing in the stock market, and many earned a lot of money this way. It soon became very successful and lots of people started joining the stock exchange. Although this all took place, there still was a lot of suffering taking place, namely farmers producing surplus supplies of crops and also the problem of poverty. Soon, the whole stock market broke down and therefore the great depression began. In this essay, I will explain what factors caused the great depression in detail and come to a conclusion about this and also which factor was most important. The main factors were use of speculation in the stock market, Trade problems, farming problems and Poverty. Answer The great depression was started by many factors, some long tern and some short term. These factors are illustrated below Firstly there was the factor of Poverty, where there was an unequal distribution of money to different people. ...read more.

Middle

Farmers tried borrowing money of banks for mortgages, but when they couldn't pay back, the banks took their land. There was the factor of Trade problems. Tariffs were put up in the country, preventing any foreign goods from coming in to America cheaply. This was very good for companies, as people starting realizing it was cheaper to buy goods from American stores rather than abroad. The only problem was that there were more and more crops developing in America. The only way to get rid of these was to sell them to other countries. The only problem was that other countries also put up these tariffs to save their own economy, so American business man found it hard to export into Britain. This really affected farmers, as now there was still a lot of surplus food with not much value. Companies were also affected as some of their money came from exporting. Because of the new tariffs, they had to close down some production lines. The last factor affecting the great depression was the biggest one. It was speculation on the market. This factor brought the crisis of the Wall Street crash. ...read more.

Conclusion

Secondly, the poverty was also important, but this led a lot from the speculation, because many people started living in poverty. This was second most important, as it also led to many job losses and companies cutting production lines. Also, many unemployment occurred because of this, and so there was a depression of not money for food and to live. The third most important factor was the farming because, farmers had a lot of surplus food available, and that was too much for America. They joined the poverty when the food became worthless in value and that meant that they also are linked with the second factor. America had too much food, and so farmers lost their jobs. The final point/ factor is trade. This is when tariffs were implied to America which actually helped it although when put up in other countries, it actually did not let the surplus food get sold to other countries. This did not really affect anyone directly, as the export of food would have only been help. The most important factor, I thought, was the Speculation although I had some doubts with the poverty. The fact remains however that without speculation, and the Wall Street crash the great depression would not have started because many people were still rich and had a lot of money in the stock exchange. ...read more.

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