Explain the underlying and immediate causes of the Great Depression.
The causes of the Great Depression are all important and mostly interrelated. The
distribution of wealth was far outbalanced as much more money was acquired by the rich.
Oversupply and the inability of consumers to buy products caused several more problems.
The declining demand was receding long before 1929. The coal, railroad, and textile
industries were all losing money. Major industries’: such as automobiles,
construction, and mechanized agriculture, consumption levels stayed the same. However,
when the demand began to level, the supply surpassed demand. Many unsold products were
stored and many workers were laid off. Wages soon decreased and so did the purchasing
power of the employed.
People borrowed money from many sources. When the stock market crashed, the loans were
expected to be paid back. Many withdrew their savings to payback the loans. This caused
several banks to collapse. Upper classes grew richer and middle and lower class’s