I try to learn more in depth about topics that interest me. I was reading about the Great Depression, but it is so hard to understand for me what exactly cause it, as I read it, it feels like a mix of fancy words that don’t tell me much (likely due to my lack of knowledge and english not being my 1st language). So, could anyone explain me in simple words what exactly cause the Great Depression?
In: 292
What caused the Great Depression? Many things, but inequality was high on the list. In 1929, the top 1 percent of Americans owned more than half of their country’s wealth. Many of the remaining 99 percent went into debt during the 1920s to support their consumer lifestyles and open businesses.
To make matters worse, wealthy financiers on Wall Street took on risky debts and made risky investments. This recipe for disaster is what cooked up the 1929 stock market crash.
People—mainly in the United States, but also from other parts of the world—responded to the stock market crash in the worst way possible: they panicked. They took all their money out of the banks. Now banks didn’t have enough cash on hand, and the whole crisis got worse.
In the first years of the depression, the global production of goods ground to a halt. American manufacturing declined by 36 percent from 1929 to 1930 and by another 36 percent the following year. International trade fell by 30 percent. As a result, the price of even basic necessities, like wheat and rice, plummeted. Wheat prices fell by 40 percent and rice by 50 percent, globally. The price of coffee, cotton, rubber, and other cash crops fell 40 percent, crippling the economies that produced them. As production and trade declined, factories shut down, and workers lost their jobs. By 1932, around 30 million people were unemployed worldwide.
Latest Answers