what weakness was in the economy in the 1929's during the great depression?

Answer 1

"Causes" in "Great Depression", Wikipedia : http://en.wikipedia.org/wiki/Great_Depression#Causes

"Theories at the time" in "Causes of the Great Depression", Wikipedia :
http://en.wikipedia.org/wiki/Causes_of_the_Great_Depression#Theories_at_the_time

Answer 2

The Great Depression didn't begin until Ocotober of 1929. It lasted until our entry into WWII.
If you're asking what caused the depression, in general, depressions are cyclic, produced in part by overproduction in manufactured products, which causes factories to wind down production by laying off people, or causes them to close, completely throwing people out of work. This causes defaults on loans, panic selling on the stock market, and deep problems for banks.
In the '20's people could buy stock on credit. This led to a stock boom (bubble is a better word) that had little relation to real world factors. Once the crash happened, different weaknesses emerged.
Prices fell precipitously. Farmers couldn't sell their products at a profit, and were forced to give up farming. Automobiles couldn't sell as well, so lots of people were thrown out of work. The worst problem was the belief that government shouldn't do anything to relieve the suffering - this was a principal point of laizzez-faire economics. Hoover was a compassionate man (before his election he organized famine relief for Russians), but his beliefs kept him from acting. He also couldn't believe that the depression would get as bad as it did.
With the money supply very tight, Roosevelt wanted to do more than he could. He instituted public works programs like the Civilian Conservation Corps and the Public Works Administration, which did put people to work, and gave others confidence that he cared and that he was trying. He was able to push through Social Security, which Republicans blasted as Socialist (never mind that we were the last major power to adopt this).
For a great fictional treatment of this period, watch "The Grapes of Wrath" with Henry Fonda.

Answer 3

During the 1920s, once Democrat Woodrow Wilson was replaced by Republicans, they began to misuse the new 1914 Federal Reserve Act.

By converting real gold, now forbidden to be owned by so-called free citizens, and printed paper money as certificates of ownership of wealth instead, our governing minds sought to make currency available where for instance shortages in western states of gold and silver coins had created earlier problems in the 1800s.

But the Republicans also began pump-priming--keeping borrowing rates at the Fed at 2--3 percent for prime-rate institutional loans; then they passed a rule stating a citizen could pay 10% only of a stock's asking value at the time of purchase, making the rest of the 90% fantasy wealth; and then they handed out money incredibly enough to anyone calling himself the CEO of a 'corporation".

The results of these three mistakes, the worst of all those made inthe Era, should have been predictable: within exactly 15 years of such enactments, for want of any protection against what had to occur, the Roaring Twenties were destroyed by the Great Depression.

What happened was that seeing the end coming for their paper fortunes and incompetent corporations funded by such government-printed money handed to incompetent and unworthy CEOs, a few big corporation owners began dumping stock in anticipation of a devaluation of their holdings to come. This mysterious Black Friday dumping by insiders began a spiral of no confidence dumping and corporate failures that was never stopped.

The government, instead of keeping interest rates low (as the leaders did at once, briefly), soon reversed that action, thus shutting off funds to legitimate productive executives who could have saved the situation.

Jobs were lost, factories closed, people were fired, millions became homeless, no one could buy very many goods, many lost everything; and the situation was only reversed artificially in 1941 when the US governors set us on a wartime economy and opened government-paid factories, thus giving people jobs for the purpose of meeting the military emergency and ending the artificial government-caused criss.

Answer 4

The stock market crash that signaled the beginning of the Depression was caused because people were allowed to by stocks on credit with only 10% down. The economy was actually a thin bubble and when cash was demanded, there was none to support the businesses.

Answer 5

What weakness was in the economy? We were in a depression. Try reading about it. Wikipedia is the easy way to start.