3. The banks structures weren't stable. They were to weak.
The biggest single cause was margin buying of stock. 100 shares could be bought for the price of 10 shares, the rest payable later "as the stock grew". Soon there were billions of dollars of unpaid-for stocks in circulation, and investors got nervous, culminating in thousands of margin calls ("we want the rest of our money NOW"), and runs on banks to remove cash money "while it was still safe". Countless numbers of people who were very wealthy - but only on paper - were wiped out overnight.
1) Relaxed lending standards in mortgage banking. US debt load had grown to 130% of GDP by 1929 (in contrast it grew to 300% of GDP in 2008)
2) A relaxed government policy on the business and banking collapse. Relax standards resulted in insolvent banks. There was no FDIC to insure deposits so as consumers made a run on banks to withdraw deposits, balance sheets went to zero, and deposit holders lost all of the money in the bank (this can't happen today with the FDIC for accounts up to $250K (and in some cases more).
3) A massive contraction in consumer spending due to the collapse of the banking system and a complete loss of faith in the US economic engine. At its worst during the great depression, consumer spending only accounted for 20% of the US GDP.
The four main factors that contributed to the start of the Great Depression were:
1. Unequal distribution of wealth.
2. Over speculation of the Stock Market.
3. Increase in manufacturing/agricultural output but insufficient pay wages to workers.
4. Buying on credit, which led to debt.
Stock Market Crash
savings of the rich
The three causes of the great depression were stock market, bank failures and reduction in purchasing by people and companies. The stock market happened in 1929.
yes there are MANY
The Great Depression was caused by a large amount of environmental factors that proved to be to much to handle at the time. The top causes of the Great Depression are: the stock market's crash, World War I, and the changes within the United States's political power.
Although the causes are still debated to this day; typically most people date the Depression to the October, 1929 stock market crash.
overspeculation, expansion of credit, debt, high tariffs
The immediate cause of the Great Depression was the stock market crash of 1929, also known as Black Tuesday.
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Obama
The dustbowl is a nickname for the Midwest during the great depression. I is one factor that causes the great depression because of the shortage of food.
yes there are MANY
Great Depression
There has only been one Great Depression.
The Great Depression was caused by a large amount of environmental factors that proved to be to much to handle at the time. The top causes of the Great Depression are: the stock market's crash, World War I, and the changes within the United States's political power.
The most popular belief of the cause of the Great Depression is the stock market crash of 1929. Economist still debate about the other causes. Excess speculation in the stock markets added to the causes of the depression.
the cause what not enough chesse in germany
There were several things that culminated in the Great Depression. Primary among them are the Stock Market crash of 1929 and the unequal distribution of wealth.
what caused world war1 is the great depression
Although the causes are still debated to this day; typically most people date the Depression to the October, 1929 stock market crash.