No one seemed to know how to handle money when it came to stocks before the Great Depression. People threw their money into company stock thinking that no matter what, they would get more back.
Stocks are great! Ive Invested my Life savings into them!
Banks loaned massive amounts of money. This led to them being drained of cash. This would come back to haunt the country later.
Sure! We will give you a loan!
Many companies contributed to the downfall by overselling. Americans couldn't even afford what was being sold to them. The companies couldn't produce it either!
We have sold what we don't even have!
Stocks lost value and brokers wanted their money back. Everyone rushed to see their stocks to be able to pay. This plummeted the market
I need to get rid of this stock!
As everyone tried to get their money out of the banks in a mad panic, the banks realized they didn't have anything to give. excessive loans caused this, due to no one paying back.
We don't have any money left! we need to close!
Banks didn't have money, companies didn't have money. No one had any money. Jobs where scarce because employees couldn't be afforded. Many lost their life savings after the banks collapsed. MostAmericans where left with nothing.