Why did many business shut down during the great depression?

Question: Why did many business shut down during the great depression!?
Best Answer - Chosen by Asker:

About one fourth of the American population was unemployed, which was about 15 million people!. Couldn't find stats on how many businesses closed, but if people aren't working, they can go to stores and spend!.Www@QuestionHome@Com

um!.!.!.isnt that extremely obvious!?Www@QuestionHome@Com

chain reaction, there was a world depression in there also there was a lot of panic, so that added to the mess!.Www@QuestionHome@Com

Nobody was spending money!.

No money, no business, no reason to operate a business!.

Especially high profile businesses selling luxuries and such!.Www@QuestionHome@Com

How can you ask that question when the sentence ends with the "great depression!."Www@QuestionHome@Com

Many people lost their savings and less money was spent, so businesses shut down because they weren't making any money!.Www@QuestionHome@Com

My guess would be they ran out of money like the rest of the population! Thats pathetic that you haven't a clue about the depression!!Www@QuestionHome@Com

Lack of money, all the banks went bankrupt!.!.!.there was nothing to buy anything with!.Www@QuestionHome@Com

No one was buying ANYTHING! There was a DEPRESSION on!.

HURRAH VEE!!!!!! I think an awful lot of people just want to show off and all they're REALLY doing is hurting our children!. Now they'll "violate" me!. Don't worry - I'm quite used to it!. I won't do homework either!.Www@QuestionHome@Com

cause they were all extremely depressed!Www@QuestionHome@Com

Simply put!.!.!.

Many familes were living near or below the poverty lines!.!.!.no cash for little extragances!.!.!.

Families we getting by on the bare neessities, if they were lucky enough to be able to afford those!.Www@QuestionHome@Com

Here in Oklahoma, when the stock market crashed, all the banks locked their doors because people were coming to get their money out, when the bank had invested it in the stock market!. My great grandmother, who was widowed, lost $10,000!.00 in one day and was hence destitute, having to marry the first man who would offer!. also, in Oklahoma, all crops failed due to a drought that had been going on for years!. No one had money due to crop failure and stock market crash!. To make things worse, there was a Bangs outbreak (a disease that affects cattle) that caused the government to come in and kill and burn everyones cattle, they allowed people to keep one healthy cow to provide milk to the family, other than that, they were shot and burned!. Gardens wouldn't even grow unless you carried water from the well to water them!. My grandfather told me about several of his friends who went hungry!. He even knew some kids that got so hungry, that they gorged themselves on unripened watermelons (melons grow well in a drought), which soured on their stomachs and killed them!.Www@QuestionHome@Com

the GREAT DEPRESSION wasn't a 'mental depression'

NO MONEY - everyone was completely broke, bankrupt! that's what GREAT DEPRESSION means! zip, nada, zero!. No jobs, banks were bankrupt, businesses were OUT of business, people everywhere were in soup lines just to get some food in their stomachs!.

PEOPLE!! this is pathetic - we have to stop doing homework for these kids, they're not going to learn anything if we do it FOR them!.Www@QuestionHome@Com

It was the evaporation of capital!. All that wealth, that was just on paper, just disappeared!.

Remember, it is not cash that drives the economy, it is capital investment!. When there is no capital to invest, everything freezes!.

Think of it this way!. If the only way that a businessman can fund next year's business is to borrow the money from the bank, and the bank suddenly has no money, how is he going to survive!? Or a farmer that needs to borrow for next season's seed!? What is he going to do if the bank has no money!?

Things just start to go down in a spiral!. Businesses scaled back their purchases to what they could only pay cash for!. Farmer went into default and lost their land!. Massive layoffs!.

A similar thing is going on right now in the real estate market, and that debacle is spreading to the general economy!. What happened to all that land wealth!? It just vanished!. people cannot fund loans because the banks have no money!.

Hope that helps your understanding of it!.Www@QuestionHome@Com

Bless you Vee!.!.!.!.!.Www@QuestionHome@Com