Essay What Caused The Great Depression

In 1929, the United States economy appears to be good and strong, at the moment; all Americans have some extra money or credit to buy some extra goods. The good economy was reflected in the Stock market, profits were big, more and more people invested in Stocks. In addition, farmers produced more wheat, cotton, corn, etc. and industries produced more goods that the needed to supply the country (over production), farmers’ and industries owners’ ambition make them produce more and more crops and goods. Americans using credit to buy goods they can’t pay, everyone investing all its savings on the stock market, overproduction on farm and industry area, plus America's new way of think, and other economic factors, make the economy of the country less strong, produce more unemployment and as result pushing the country into the Great Depression.

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 Great Depression started in 1929 and lasted up until 1939. It happens to be the worst economic downturn for the United States and the the rest of the world. It caused companies and corporations to eventually go bankrupt as well as workers to be laid off. Another effect of The Great Depression is that factory production was reduced, and the banks started to shut down. In the lowest point of The Great Depression in 1933 nearly 15 million workers in America were unemployed and one half of the banks started shutting down.

Throughout the 1920’s, new industries and new methods of production led to prosperity in America. America was able to use its great supply of raw materials to produce steel, chemicals, glass, and machinery that became the foundation of an enormous boom in consumer goods (Samuelson, 2). Many US citizens invested on the stock market, speculating to make a quick profit. This great prosperity ended in October 1929. People began to fear that the boom was going to end, the stock market crashed, the economy collapsed and the United States entered a long depression.

Once the demand went down, the employment went down as well. The stockpiling of goods caused the whole economic cycle to turn from booming to bust. “When manufacturers found that they had more goods then could be bought, they laid off workers. Unemployed workers lost their source of income and had no money to purchase goods. This caused manufacturers to lay off more workers. Once begun, the cycle was almost impossible to stop” (Mennill). Companies overproduced items from cars to appliances to wheat (The Great Depression…). The amount of goods manufactured between 1923 and 1929 had increased by 32 percent (Causes of… (U.S. History)) Because of the increase of manufacturing and stockpiling, the rate of employment fell from 3.2 percent to an unbelievable 29 percent in 1933. 29 percent of people were making no money while the rest were just making enough to survive. Either way, few people could afford to buy necessities, let alone

Since the beginning of the Industrial Revolution early in the nineteenth century the United States ad experienced recessions or panics at least every twenty years. But none was as severe or lasted as long as the Great Depression. Only as the economy shifted toward a war mobilization in the late 1930s did the grip of the depression finally ease.

The United States (U.S) experienced its worst depression for roughly 10 years after a tragic Tuesday in 1929. The roaring 20’s was abruptly halted as millions of people across the country lost everything they owned in just a single short day. Black Tuesday, as this day is referred to in history, was the day that triggered the Great Depression and caused one of the worst economic collapses ever seen (Lecture Notes, March 30, 2016). Tuesday October 29, 1929 will be a day etched in people’s minds forever. Since this day’s aftermath caused widespread devastation throughout the country, Black Tuesday is the single most important event that occurred in the U.S between World War I and World War II.

Many people think that the Great Depression was caused solely by the stock market crash. Anybody who tells you this probably didn’t pass U.S. History in high school. The fact is, the Great Depression was caused many different factors. Four of which were overproduction, uneven distribution of wealth, protective tariffs, and the four “sick industries” of the 1920’s.

The depression was caused by a number of serious weaknesses in the economy. Although the 1920 seemed to be on the surface to be a prosperous time, income was unevenly distributed. The wealthy made a large amount of money, but more and more Americans spent more than they earned, and farmers faced low prices and heavy debt. The effects of World War I (1914-1918) caused economic problems in many countries, as Europe struggled to pay war debts and reparations. These problems build up to the crisis that began the Great Depression.

The world had faced two main economic problems. The first one was the Great Depression in the early of 20th Century. The second was the recent international financial crisis in 2008. The United States and Europe suffered severely for a long time from the great depression. The great depression was a great step and changed completely the economic policy making and the economic thoughts. It was not only an economic situation bit it was also miserable making, made people more attention and aggressive until they might lose their lives. All the society was frightened from losing money, work and stable. In America the housing market was the main factor of the great depression. A crisis of liquidity appeared in the banks forming a credit crunch. This period was influenced by over extended stock market shortage of water in the south and over trusting. The American government put down some regulations to control the productions which were essential for the war.

The Great Recession which lasted from 2008 to 2010 is often regarded as the greatest economic crisis since the Great Depression which took place during the 1930s. The causes of both crises can be said to be similar as both lie in the actions of the federal government. While the crash of the stock market in 1929 is said to be one of the major causes and sometimes even the main cause of the Great Depression, there are also other circumstances that led to this economic crisis. Bank failures during the 1930s also added to decline in the economy. The failure of hundreds of banks caused people to lose their savings and businesses to lose their operating capital. With the crash of the stock market, there was also a reduction in purchasing in the economy (consumer demand). A reduction in consumer demand led to a reduction in production and hence a reduction in the workforce. With a reduction in production and the workforce, the unemployment rate rose drastically to around 25%. Due to the number of businesses failing, President Hoover signed into law the Smooth-Hawley tariff to help protect the failing businesses. However, this created unintended consequences as trade was stifled between America and foreign countries, further adding to America’s economic crisis.

The major cause for the Great Depression was the fact that Americans began to buy goods on credit and that some bought stocks on margin. During the Roaring Twenties, various new products, such as vacuum cleaners, electric irons, fans, cars, radios, and others, began to be manufactured and introduced into the market. By 1923, there were over 500 radio stations that existed in the United States and there were over twelve million radios that were in American homes. Since these new products were expensive, a large portion of Americans bought them on installment plans or lines of credit. After years of overspending, these debts were unable to be paid back. This led to a crisis, since the banks that issued the loans took the money from the savings accounts of customers at the bank. Thus, their money was lost. When patrons of the bank were unable to recover their money, it caused a panic. This led to a rift between individuals

With the 1920s having a * Revolution, the demand for (cars, dish washers) and the inventions of the Assembly Line, which made it possible to create a large amount of products. While this lowered the amount of the produces so that the lower-class could by it the supply of the goods was much higher than the demand. Buying on margin- Before the Great Depression many people had invested in companies in hope that it would pay off, although most of the money that people put was from the bank. Stock market crash- During the 1920 it looked like the economy was booming , however this ended in October 29, 1920 and was a "89% decline in the stock prices" according to author Linda Alchin.

The great depression led to many problems like banks failing, job loss, and starvation. The unemployment rate from 1920-1930 was growing after the stock market crashed and i believe it could've been solved if the government would of took more charge. In the 1920’s 49 businesses had failed. This took a big part in the great depression because many poplin the U.S had no money so they had to wait in big lines just to get a meal and many times it was just a bowl of soup. During 1929-1933 many banks had failed and people rushed to go and get their money, but many of them never got their money back until this day mat older people still don't trust banks to save their money. In 2008 the U.S had a financial crisis which involved in many banks not

There are various factors that led to the Great Depression. To begin, the lack of bank regulation was a big factor. The Federal Reserve Act which made banks have money on reserve, was not enforced. Another big factor was easy credit, Easy credit made it easy for people to get money out the bank without having the money to pay it back. Furthermore, the reduction in purchasing across the board can easily be said to be another key factor. With the stock market being down many people within every social class stop purchasing items. Which would cause a decreased not only the number of items being purchased but also the loss of people jobs. Many people had thing on layaway, so usually they would just pay for it monthly. However once they lost their