In the midst of 1932 the United States had ungoed an almost irreversible economic disaster. The inception of this disaster was on October 29,1929 in New York City (also known as Stock Market Crash) when one man decided to withdraw his money from the local bank. After this banks from across the country shut down as well as factories. Mass numbers of people became unemployed with no government assistance seen in the future. The ending of the depression was during 1939. After the depression numerous issues were addressed which include an increase in debt after War World One, the cycle of buying and taking others deposited money,and the contradicting effect of buying installment faster than an income rate.
War World One created a constant debt with the United States. At the end of 1919 the United states owed over 10 billion dollars to foreign countries. Tariffs like Fordney- McCumber also prolonged this debt. This was proven in document 5. Also in document four, the cycle of of buying and taking others money was shown as another way to increase debt.
The cycle of buying and taking others deposited money was seen most in document four. This was frequently seen throughout the depression and was a main reason it was started. Buyers would owe money to maintain their stocks and with any negligence towards maintaining the stock the broker would have to sell the stock. This was proven in document four, and was brought up in document one relating to the cycle. Document one showed people buying installment rates faster than income rates.
The contradicting effects of buying installment faster than an income rate was present in doc two and one. In doc one The rate of buying installments were increasing faster than the consumer’s income rate which would cause a increase in debt. This would the eventually slow the economy down to not buying which caused unemployment. Doc two showed the family incomes which could of been because of this cycle .
The depression was learned from by understanding the cycle of installment buying and stock selling and how War World One increased the US debt. With this understood we as Americans have become more cautious.
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