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When the stock market crashed, everybody lost all their money. So now you have people with no money too. The stock me
market couldn't make money because nobody had any money to invest in stocks.

Then comes the banks. When one person said that the bank wouldn't give him his money, everybody crowded outside the banks demanding for their money back. But the banks didn't have enough money to give everybody because nobody that borrowed from the bank payed back their loan. Thousands of banks in the U.S. closed because they didn't have any money.

The Effects of the Great Depression

When the cotton machine was invented, farmers were so happy. They could finally mass produce cotton. But with the invention of the cotton machine, comes many problems. Farmers started producing way too much cotton which dramatically decreased the price per bale from 18 cents to 6 cents. This meant that farmers were losing 60% of their income! Then comes the "BOOM" and "BUST." With the increase of the number of bales produced, there was too much supply and not enough demand so they had to lower the price to sell the bales. This caused an economic crisis because people were losing too much money.