The Contributions to the Great DepressionBy John Norse
As the economic depression deepened in the early 30s, and as farmers had less and less money to spend in town, banks began to fail at alarming rates and the loss of jobs.
The stock market crash of 1929 was due to a market that was overbought, overvalued and excessively bullish, rising even as economic conditions were not supporting the advance. The crash began on October 24, when the market opened 11% lower.
Although it originated in the United States, the Great Depression caused drastic declines in output, severe unemployment, and acute deflation in almost every country of the world and it messed up trade with other nations as well.
During World War I, farmers worked hard to produce record crops and livestock. When prices fell they tried to produce even more to pay their debts, taxes and living expenses. In the early 1930s prices dropped so low that many farmers went bankrupt and lost their farms.
Fewer families were buying new cars or household appliances because of tight money, people would rather fix an old item then buy a new one.