Causes of The Great Depression Essay

During the late 1920’s, manufacturing caused the stock market to continue to reach new highs. Even the president said, “The great wealth created by our enterprise and and industry, has saved our economy, has the widest distribution among our own people, and has gone out in a steady stream to serve the charity and the business of the world...anticipate the future with optimism.” (Doc B) The

There are some main causes The great depression, first in 1934 per week They made $ 4.80 per week and They paid $ 3 by The incomes of Their Homes, all that happened to Birmingham Alabama in 1934, in Chicago everything rises for The men and The women for the food , And then spent $ 1.10 that was spent on food in stores, The three cases are The three cases were The financial downfall, low wages, and unemployment.

The majority of individuals trust that the stock exchange crash that happened on October 29, 1929 is the main source of the Great Depression. The stock market accident was not the sole reason for the Great Depression, but rather it acted to quicken the worldwide economic breakdown of which it was additionally a symptom. Numerous components prompted the Depression. One of which being bank failures, another the global downturn, and dry season conditions.

The Great Depression remains to be the worst economic slump ever in American history and one which spread practically all over the industrialized world. The Depression bombarded in late 1929 and lasted nearly a decade. Many factors elemented the depth of the widespread prosperity. However, combined, the greatly unequal distribution of wealth throughout the 1920's and the extensive stock market speculation that took place during the latter part that same decade remain the key of all elements.

The economy also changed drastically during the Roaring 20’s. The Boom Cycle was the first reason the economy changed in the early 1920s. WWI had just recently ended in 1918, so this meant that American companies could once again begin building materials to sell, and not just to benefit the war. Soldiers were also coming back home from overseas, and these thousands of men would need jobs. As shown in Document 1, this resulted in a Boom Cycle. The Boom Cycle consists of increased employment leading to increased profits, this resulted in increased purchasing power. Increased purchasing power lead to an increased demand for goods, meaning companies increased production, which resulted in increased sales, and finally completing the cycle, as increased sales led to increased employment. Because of this boom cycle, the American economy was extremely prosperous in the early 1920s. There was one downside to this increased economy, however. The 1920s generation grew up in this prosperous economy, and the older generation saw them as being spoiled. This idea of the 1920s generation being “spoiled” coincides with the flapper movement, as women began wearing more expensive clothing and jewelry. As seen in Document 9, the older generation felt like the 1920s generation didn’t appreciate hard work, or anything that they had in life, and they believed that the new generation wanted more than they needed or deserved. This sense of greed and materialism led people to want to make even more money, so when they heard of the great success people were having in the stock market, thousands of people began to also put money into the stock market. Document 2A states that the average American could make $20,000 to $30,000 overnight by simply investing in the stock market. However, like most good things, this economic prosperity came to a crashing fall. In 1929, the American economy

The economic expansion of the 1920’s, with its increased production of goods and high profits, culminated in immense consumer speculation that collapsed with disastrous results in 1929 causing America’s Great Depression. There were a number or contributing factors to the depression, with the largest and most important one being a general loss of confidence in the American economy. The reason it escalated was a general misunderstanding of recessions by American policymakers of the time.

After 1927, consumer spending declined and housing construction slowed. Inventories piled up, and in1928 and 1929 manufacturers began to cut back on production and lay off workers. Reduced income and buying power in turn reinforced the downturn. By the summer of 1929 the economy was clearly in a recession. Although the stock market crash and its immediate consequences contributed to the Great Depression, longstanding weakness in the American economy accounted for its length and severity. Agriculture, in particular, had never recovered from the recession of 1920-1921. Farmers faced high fixed costs for equipment and mortgages incurred during the high inflationary war years. At the same time prices fell because of overproduction, forcing farmers to default on mortgage payments and risk foreclosure. Because farmers accounted for about one-forth of the nations gainfully employed workers in 1929, their difficulties weakened the general economic structure. Other industries also had experienced economic setbacks during the prosperous 1920s. The older industries such as textiles, mining, lumbering, and shipping faltered, newer and more successful consumer- based industries, such as chemicals, appliances, and food processing, proved not yet strong enough to lead the way to recovery.

There were several factors that played a major role in the Great Depression. The main explanation was overproduction of both farm and factory and the unequal distribution of wealth throughout the 1920s. The excessive speculation in the 1920s kept the stock market at a deceitful high, and came crashing down in 1929. Over extended credit at

In the 1920s, American economy had a great time. The vast majority of Americans in 1929 foresaw a continuation of the dizzying economic growth that had taken place in most of the decade. However, the prices of stock crested in early September of 1929. The price of stock fell gradually during most of September and early October. On “Black Tuesday” 29 October 1929, the stock market fell by forty points. After that, a historically great and long economic depression started and lasted until the start of the Second World War. The three causes of the Great Depression are installment buying, uneven distribution of wealth and the irrational behavior in the stock market.

     During the 1920’s, four of America’s leading industries began to struggle. First, railroads had difficulties because of the growing competition from cars, trucks, and busses. Second, textiles floundered because of the foreign competition from India, China, Japan, and Latin America. Furthermore, the revolutionary transformation in women clothing reduced the amount of material needed and thus lowered the demand for cloth. Third, the coal mining industry struggled because of competition from cheaper, more widely available resources such as natural gas, oil, and hydroelectric power. Fourth, America’s agriculture industry staggered chiefly from overproduction. Many farmers borrowed money to expand their operations and couldn’t pay back their loans because the prices of crops dropped about 50 percent due to foreign agricultural competition.

Many people speculate that the stock market crash of 1929 was the main cause of The Great Depression. In fact, The Great Depression was caused by a series of factors, and the effects of the depression were felt for many years after the stock market crash of 1929. By looking at the stock market crash of 1929, bank failures, reduction of purchasing, American economic policy with Europe, and drought conditions, it becomes apparent that The Great Depression was caused by more than just the stock market crash. The effects were detrimental beyond the financial crisis experienced during this time period.

A principal cause of the Great Depression is the Black Tuesday or stock market crash of 1929, which was the trade of stocks that caused a decrease of the stock price and the loss of billions of dollars over two days. In 1932, Franklin Delano Roosevelt’s campaign offered Americans a New Deal that consisted of an intervention to align the economy caused by the Great Depression lead him to be the president of the United States.

There are many periods that I would like to learn about because all have a very interesting history behind them. The Great Depression however is the period in which I would like to live in because although it was not the greatest period in history we have learned from it. We all know that the Great Depression had many factors that caused the economy to be unstable.It is great that the companies where able to produce more in quantity of their goods but that was not as good when they did not raise the market as well. Having the experience to see how many families had to live through hardship in order to survive with many losing their homes must have been very hard for them.Therefore, it is something that I would have liked to be part of but

America’s Great Depression is believed as having begun in 1929 with the Stock Market crash, and ending in 1941 with America’s entry into World War II. In order to fully comprehend the repercussions and devastating effects of the Crash of 1929, it is important to examine the factors that contributed to the catastrophic event which led to The Great Depression. The Great Depression was the worst economic slump in U.S. history, and it spread to most of the industrialized world. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920s, and the

In the 1920’s the U.S. economy was booming. The value of stocks were rising and being bought. People were buying tons of stocks. They put as little as ten percent in. Then everything started tumbling down and people lost about ten times as much as they put in.