Two causes of Great Depression

Answer 1

Two of the MAIN causes of the American GREAT DEPRESSION:

1. 1929 Stock MarketCrash (October, 1929) - The Stock Market Crashed in the U.S. causing the loss of $40 Billion Dollars for Investors

2. Nearly 10,000 Bank Failures in the Late 1920s and Early 1930s - NEARLY 10,000 BANKS CLOSED & FAILED - Millions of People Lost All of Their Money & Savings between the Late 1920s & Early 1930s. This DIRECTLY Led to the creation of the FDIC, which Federally Insures Any Deposited Money (A minimum of $100,000) per Account, with any FDIC licensed Bank (which almost EVERY Bank Today Is).

Answer 2

There were several major causes of the Great Depression in the United States.

1. Unequal distribution of wealth. There was not a large middle class. While wages were rising for the majority of workers, they were not keeping pace with the increase in the cost of living or the wealth in the hands of the industrialists and others in the upper income classes.

2. There was over speculation in the Stock Market, which was not regulated.

Many Americans purchased stock on credit. This was known as margin buying.

3. Increased manufacturing and agricultural output, but wages that did not keep pace for the consumers to purchase all that was produced or grown. Hence, inventories increased and agricultural income remained low.

4. Buying on credit, known in the 1920s as installment buying. People purchased things like refrigerators on time, and did not have money to pay for the product in the future, when the bills became due.

Answer 3

The two of the general causes of the global Great Depression of the 1930s was because of the crash of the stockmarket......this needs work but I kept it for reasons of reference.

The 1920's in the USA was for the most part a financial success. So much so that its exuberance led to the over extension of credit in the financial markets. This was also happening in the major financial markets in Europe as well. The USA market for foreign goods & services was a boast for the economies of the US's trading partners.

When markets get too high, they correct themselves by dropping and in the late 20's they dropped fast. There was no safeguards for peoples' savings in banks as well. The "correction" became a panic and thus when debts were called in and there was no liquidity in the stock market it collapsed setting off a dominoe affect throughout the world. That was cause No. 1

Cause No. 2 was the reaction to the collapse by the Federal Reserve System. The "Fed" raised interest rates and dried up the rate of borrowing. The Fed believed that doing this was the solution to the financial crises. It was well thought out but the markets did not respond and unemployment sky rocketed.

No. 3, the 25% unemployment rate, the result of the first two reasons, dried up any demand, as many people had little money... banks had closed.

Answer 4

one i noe is buying on margin