Generally this would result in people having cash being willing to buy more and, since there was such a large availability of goods and services, prices would decrease causing people to invest their money in those goods and services. Unfortunately just the opposite happened.
People weren't able to find jobs because there were so many goods and they were no longer needed to replace goods that were being sold. Services became cheap and there were more people to provide those services than necessary. Imagine looking for a housekeeper during the Depression. You have one job that pays very little and occupies someone for only 3 days a week. You put an ad in the paper and before you know it there are 100 people lined up, women, children, men of all ages. In another couple of hours there are 200, such was the overwhelming sheer humanity during the Depression.
Since jobs were scarce people didn’t have any money to spend, or they were afraid to spend what little they had. Each industry affected the next and pretty soon industries began to fail. With inflated inventories there was no need and no desire to produce more, businesses were losing due to the loss of income and no longer borrowed from the banks. A large number of industries suffered great losses in numbers.
Banks had money to lend but no one to borrow, so even…