The first major cause of the depression was an unequal distribution of wealth among the American citizens. A mere .1 percent of Americans held a whopping 42 percent of the nations wealth. An illustration would be if there were only 1,000 people left in the world and there was only 1000 dollars left but money was the key mean of survival, one person would hold 42 percent of the money. In the example, the one person would have $ 420 while the rest of the people would have an average of .58 cents to live off. With the uneven amount of money around, the average American family earned $750 dollars. At the same time, Henry Ford made fourteen million dollars. If that is compared to today’s standards, the average family makes 18,500 dollars. If Ford’s personal revenue would

The third reason for the great depression is the most widely known. Americans did not only buy their goods and food on credit; the people began to look for quick fortunes in the stock market by paying for their shares on credit. When buying a stock on credit, the buyer would only pay for a small percentage of the share and loan the rest from a bank. After the person would make a profit and sell the share, he would only need to repay his remaining debt from the sale of the stock plus a five percent commission fee. Stories of quick fortunes caused hoards of citizens to try their luck in the stock market. By 1929, Americans owed eight and a half billion dollars in broker’s loans. The citizens were concerned only with the price of the stock. They put no care into whether or not the company was making any money or paying its dividends.

Because Americans didn’t save their money they ran into the second cause for the great depression: debt. The debt was caused by a large amount of overproduction of food and goods. Americans were able to produce large amounts of goods because of their new industrial advances. However, the people had saved no money to buy these items. Americans couldn’t afford the goods produced which lead to massive storage problems and no revenue for people selling the goods. Because American couldn’t buy the goods on their own, they bought items on credit. The debt accumulated by Americans rose from 1.4 Billion to 3 Billion dollars. Such a large debt and rather small paychecks lead to Americans having no wages because their earnings would go straight to pay for their outstanding debts. Because of this, Americans fell deeper into debt.

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