How Did The Stock Exchange Lead To The Great Depression

There are multiple conditions that occurred in the US that aided in the economic downturn leading to the Great Depression. Prior to the stock market crash of 1929, a classical approach, advocated by Adam Smith, was how America felt its political and economic system functioned. Adam Smith’s classical approach is embedded in the concept of a laissez-faire economic market, which suggests that the US would thrive if left alone (lecture). This approach requires a noninterfering government and allows individuals to follow their own self-interest, which was supposed to keep economic order (Cochran & Malone). Additionally, as discussed in lecture, this theory assumes that markets are inherently stable, self-adjusting and self-regulating, and

The Stock Market Crash occurred on October 29th, 1929. Wall Street got struck on Black Tuesday when, on the New York Stock Exchange, investors traded 16 million dollars worth of shares in one single day. Billions of dollars were cut, destroying the investments of thousands of investors. After the event of Black Tuesday, America’s industrial world spiraled downwards into the Great Depression. This was the most powerful and extended economic breakdown in the history of the Western Industrial world up till then.

Few Americans in the first months of 1929 saw any reason to question the strength and stability of the nation's economy. Most agreed with their new president that the booming prosperity of the years just past would not only continue but increase, and that dramatic social progress would follow in its wake. "We in America today," Herbert Hoover had proclaimed in August 1928, "are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us."1

The adherence to the gold standard, which joined countries around the world in a fixed currency exchange, helped spread the Depression from the United States throughout the world, especially in Europe. In the fall of 1930, the first of four waves of banking panics began, as large numbers of investors lost confidence in the solvency of their banks and demanded deposits in cash, forcing banks to liquidate loans in order to supplement their insufficient cash reserves on hand. Bank runs swept the United States again in the spring and fall of 1931 and the fall of 1932, and by early 1933 thousands of banks had closed their doors. In the face of this dire situation, Hoover’s administration tried supporting failing banks and other institutions with government loans; the idea was that the banks in turn would loan to businesses, which would be able to hire back their employees. (History.com) During the first phase of the Great Depression, the U.S.

Families had much to think about, others panicked economically, and people could not be fed.

World war one or the great war as it was known at the time hit Europe hard. That Europe was not the only region affected by the consequences of war. The American economy would go through great upheaval in an era of American exceptionalism. However wall so many Americans we're working hard and being frugal with that money there was of course an uptake of reckless spending. With regards to this reckless spending came the Notion of buy now pay later. However with this new attitude about money would quickly change due to the fact that companies were pumping out more products than were what was being purchase and people had no need to repurchase product. This all contributed to something known as The great depression a rather turbulent time a source

The 1920’s were so prosperous for most, people began to spend money just for the sake of spending money. They spent money on things they didn’t need, and often they took risks with their money, usually involving stocks, not even thinking anything could go wrong. During this era, stocks seemed like the a foolproof way to gain money, and many times they were. People thought that buying stock was such a sure way to earn money. They began buying more than they could afford and borrowing money for the payments, known as buying stock on margin. This is a very risky method of earning money, because you were risking that if the stock is worth little, you wouldn’t be able to repay your debts. Also, factories were mass producing products, such as the

First, the United States started currency reform so it would work with the modernized financial system. The second factor the nation put into place was taxing foreign goods coming into the United States. This helped the nation have more income to fix the mess of the depression quicker. Thirdly, businesses that had expendable cash employed local people for odd jobs to help in their local area. The forth factor was the population growing; the larger amount of people helped the balance of production and consumption. With the economy balancing out, people started getting work again; which made it so there were more people buying the goods being produced. The last major factor was the high demand for cotton and other products in other countries. The demand made it so the nation could produce large amounts of products and sell those products in other countries on top of in the United States. According to “A Short history of the International Economy since 1850” by William Ashworth; “one government after another was instituting enquires as to what had gone wrong – enquiries which produced the most varied and often unconvincing explanations.” (p. 212) For example, some sources explain when the currency was changed to the gold standard it did more harm than good: but others explain that the gold standard did a significant amount of good for the economy. The Webster dictionary defines the gold

The Great Depression was a period in not only American history but other countries, faced the longest economic downturn due to the stock market crash of 1929. It was called the Great Depression because everyone was literally depressed. Poverty rates were at an all time high due to fathers and mothers losing their jobs and businesses which meant bills couldn't be paid and means couldnt be met. With millions of Americans frustrated and left clueless of where their money went they wanted to know what caused it all.

The Great Depression started within the year of 1929 and had finally ended in 1939. This was caused by the stock market crash in October, by this, causing the Wall Street into a panic and cleared millions of investors. As years are passing by, consumers are dropping their investment and thus causing companies to let go of their people. By 1933 about 13-15 million Americans were unemployed and nearly half of the banks had failed due to people wanting to withdrawal their money. In the 1930s, President FDR came into the picture and he had helped the ease of the Great Depression, although it wasn’t enough; however, in 1939 after the Pearl Harbor Attack, it was finally getting back into gear with American industry and the Great Depression had ended.

The Great Depression lasted from 1929 to 1939, and was the worst economic downturn in recent history. It began after the stock market crash in October 1929, which wiped out millions of investors. The Great Depression impacted people’s living conditions, people lost their jobs, and farming was near impossible.

In 1929, the United States stock market crashed. This made for a world disaster. The British borrowed money form the United States to pay off their war debts, and now the money wasn't there. The stock market crash had a domino effect on the whole world. The world began to fall apart. People tried to start new governments but they didn't last long before they failed.

     In relationship to these tensions were other forces as well. For example, much of the world was suffering from a depression and this led many to worry and blame others for their position. There were also those elements listed below:

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.

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