Great Depression Dbq

Following the end of the First World War, the United States was initially prosperous. In 1929, that prosperous age about-faced into a downward spiral that enveloped the entire country. What was eventually called the Great Depression was essentially caused by four major events. At the start, the stock market was strong and thriving and the population was willing to invest in it. Americans were so confident in the market, in fact, that it was common for them to take out loans to fund their investments. When the stock market crashed many were unable to pay their debts not only to their stock purchases but also to their banks. Without payments to the loans given out, banks began to fail. Additionally, the gap between upper and lower classes greatly widened, which only increased the economic issues. On top of everything occurring, a drought developed in the Great Plains that created the “Dust Bowl” and destroyed the agriculture business. The sources of downfall in the Great Depression can be traced to the stock market failure, bank failure, farm failure, and job market failure.

The problem was that many people that bought stock bought their shares on a type of credit in which they paid part of the amount required and planned on paying the rest after they sold their share. When the stock market crashed, shares were worth nothing and the investors could not afford to pay the remaining balance of the original purchase price. Moreover it was common for people to borrow money from banks to buy stock so it became a problem for the banks when the population could not pay back their