USA HISTORY

Detailed explanation-1: -The Depression Many of the small banks had lent large portions of their assets for stock market speculation and were virtually put out of business overnight when the market crashed. In all, 9, 000 banks failed–taking with them $7 billion in depositors’ assets.

Detailed explanation-2: -After the crash during the first 10 months of 1930, 744 banks failed – 10 times as many. In all, 9, 000 banks failed during the decade of the 30s. It’s estimated that 4, 000 banks failed during the one year of 1933 alone. By 1933, depositors saw $140 billion disappear through bank failures.

Detailed explanation-3: -Banks Extended Too Much Credit New businesses-making new products like automobiles, radios and refrigerators-borrowed to support non-stop expansion in output. They kept borrowing and spending even as business inventories soared (300 percent between 1928 and 1929 alone) and Americans’ wages stagnated.

Detailed explanation-4: -What were the major causes of the Great Depression? Among the suggested causes of the Great Depression are: the stock market crash of 1929; the collapse of world trade due to the Smoot-Hawley Tariff; government policies; bank failures and panics; and the collapse of the money supply.