The Great Depression Article Example | Topics and Well Written Essays - 250 words

The Great Depression - Article Example After the 1929 stock market crash, there was scramble for liquidity which caused funds to flow back to America while Europe’s fragile economies crushed Spielvogel (416). According to Spielvogel (412), there were widespread structural failures among financial institutions which made banks more vulnerable. The worst hit banks were those tied to agriculture because most farmers defaulted when interest rates rose coupled with low crop prices. Farmers were also already in great debts and they owned over-mortgaged lands due to great increase in land prices in 1919. Other banks were failing to maintain adequate reserves and had resorted to making risky loans or investing more in stock market. However, they were not adequately prepared to absorb to absorb the shock of a great economic recession especially those that lent money to Latin America and Germany. Works cited Spielvogel Jackson. Western Civilization: Volume II: Since 1500. New York. Wadsworth Publishing Co. 2009.