Research Paper The Great Depression Essay Example

Research Paper The Great Depression Essay Which are the main factors that led to the Great Depression? Crash of the Stock Market One of the main caused the collapse of the stock market was double price of the stocks. Shareholders increased the price of stocks in order to make high profits. For instance, the Dow Jones Industrial Average won from 191 in 1928 to 381 in 1929. (Gussmorino) Furthermore, a lot of people (despite they didn’t have all the money) started to buy stocks on credit because were more profitable. For instance, if Mr. Brown purchases one share from Lee company for $10 and borrowing $85, after one or two years he could sell it for $350. Because the prices of the market were flying very high, the demand was lower. For this reason, borders lowered the prices and started to sell as quickly as they could. But by this action they made the crash closer than they could imagine. Finally, the stock market crash of 1929 caused stockholders to lose more than $40 billion dollars, and bank failures all over the United States. (Gusmorino) We will write a custom essay sample on Research Paper The Great Depression specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Research Paper The Great Depression specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Research Paper The Great Depression specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Overproduction Companies started to produce more than the market’s quantity demand. Said in other words there was a surplus, which brought the market to the depression. (Himmelberg) Farmers and industries produced more goods then were demanded. Also the trade with foreign countries, especially with Europe low down. Colin (October 19, 2008) in his article â€Å"Causes and Effects of the Great Depression† stated that there was an overproduction because firms were selling, but no one was purchasing. Families were very poor for buying goods that market offered. It was very hard to find a new job. Industries and farms lowered the number of workers because they had enough goods to sell. The Monetary Factor Monetary reduction was one of the factors that brought in Great Depression. In 1928-1929 the American’s banks raised the interest rates. This limited loans for business and supply of money. These limitations slow down the economy b