Early Signs of the Great Depression – Presttee R.

There were many different signs that heralded the Great Depression and all of them were warning bells to the tragedy that would soon befall the nation.

Early signs of the Great Depression started showing up all over the globe. Throughout the world, manufacturing and trade business started on a decline. This decline started in a domino effect. One of the factors that contributed to the decline was the stock market crash in 1929, remembered as “Black Tuesday.” Stockholders lost approximately $40 billion dollars. Before America could regain some of what was lost it was too late and banks began to close. In the 1930s over 9,000 banks failed. Bank deposits were uninsured, so when banks closed people lost their money. The banks that survived were so afraid of being in the same economic situation that they stopped lending money. People had lost so much money with the bank closings and were afraid of the unknown that they stopped making purchases. The loss of purchases by the consumers led to reduction in the number of items being produced which in turn caused a workforce reduction. This means jobs were lost and people were unable to pay for items they had bought through installment plans. Businesses began failing and in turn the government created a high tax on international trading which in turn caused trading to be less. All these things led to the Great Depression.