CAUSES OF THE GREAT DEPRESSION

        Many historians have mixed views on the causes of the great depression and what specific events led up to it. Mr. Stewart told us about how the first market crash was huge and hit everyone hard and gave most people a surprise, but was not when the Great Depression started. He referred to this as the sneeze inferring that there had been a "virus" or a true cause that had been implanted and growing throughout the years prior to the first crash. As you know the market continued to fall for years which makes it safe to say it took quite a long time to build up to such an extended level as well. Basic answers for the causes are bank failures and the stock market crash, but what is interesting is that the causes of those things are what are ultimately set up our economy for failure.

       The deeper causes that probably added to the instability of the market were probably general overproduction and lack of reliable international trade which Mr. Stewart also touched on. Overproduction is a direct cause of the effect of unemployment and the lack of need for workers when the supply is so high and the demand gradually lowering. International trade had gotten significantly more complicated since the end of World War 1. After Germany was forced to pay for all the war costs through reparations they needed to borrow large amounts of money in order to rebuild their industry which would allow them to eventually pay the allies back on their own. Meanwhile, the allies used the money from Germany to pay the U.S. for all the weapons and supplies we had given them during the war which created a circle of trade. Obviously this is not the most stable system because it relies on many aspects to work flawlessly including Germany to quickly rebuild all their country with such little money for the average person. This circle had a few critical holes in it which hurt international trade to an extreme amount.