The Causes Of The Great Depression

The stock market collapse was one of the most important events, in the country economy during 1929, which led the Great Depression. Before October 29, 1929, most Americans believe that stock was the key to success and fortune. John T. Raskob affirms his belief that everyone could be

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The Great Depression was an economic collapse that began in 1929 and ended in 1938. During the Depression most citizens went through hardship .Three main causes of the Great Depression were the stock market crash of 1929, the Dust Bowl, and Bank failures.

The great Depression was a major crash in the history of the United States. The crash of the stock market in October 1929 was the significant cause of the great depression. People began to panic and big businesses were not able to handle the outcome. As a result, many companies dismissed workers, which left the workers with no money. People halted to purchase goods and businesses were running in loss. Furthermore, after the world war one, many European nations owed huge amount of money to the United States. The economy of these nations was shattered and had no way of paying back the

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 causes of the Great Depression in the early 20th century is a matter of active debate between economists. Although the popular belief is that the main cause was the crashing Stock Market in 1929 caused the Great Depression, There were other major economic events that contributed just as much as the crash, such as American’s overextension of credit, an unequal distribution of wealth, over production of goods, and a severe drop in business revenue. As these events transpired the state of economic crisis in the US began to skyrocket.

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.

The Great Depression was the largest economic crisis after in 1929, and had many impacts on the American lifestyle. From events such as World War I, The Newfoundland Railway, and the global economic recession all played a part in shattering the economy. A mass of unemployment and starvation hit the United States as a tsunami, and the government had few ways to curb the downfall. Without money to fund social services and other programs, the government and banking systems found it difficult to provide for those in need. The Great Depression was valuable for shaping and molding the American economy through hardship, endurance, and grit.

Over the 1920's, many American's wealth increased substantially. This caused many to look to find a place to invest their new found earnings in something that felt safe from inflation. Many people felt that the stock market was a safe one way bet, causing customers to buy shares by taking out loans from banks, but in 1929 everything changed. After reaching its peak earlier that year, on October 29, 1929, what they call “Black Tuesday” hit Wall Street causing investors to trade over 16 million shares on just the New York Stock Exchange in a single day. Billions of dollars vanished, wiping out thousands of investors. Most people believe that the Stock Market crash can be blamed on over eagerness and false expectations. In the years leading up to 1929, the stock market held, what the consumers thought, to be the next gold rush. People bought shares with the expectations of making more money. As share prices rose, people started to borrow money to invest in the stock market. The aftermath of the crash put into motion, what is called the darkest time, economically, in American history the Great

The Great Depression occurred in a time period when America’s economy was just beginning to form. There were many different causes that lead to the Great Depression such as a new industry for American consumer products, consumerism and consumer credit, and the stock market crash. These three occurrences simultaneously caused the economy to completely spiral out of control.

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.

The economic down turn that occurred in 1929 was know as the great depression. This econmic failure left the U.S helpless and in despair till World War 2 began and shot americas economy through the roof. The great depression was a time of confusion and a vast change of life compared to how people were living in the earlier 20’s. The failure of the economy happened for various reasons, all leading up to the market crash of october 29, 1929 or “black tuesday”.It could be said that the lifestyle and the ways Americans made money in the 1920’s was ultimately the root cause of the Great Depression. To fully understand the causes of the great depression we first need to look at how life was in the early 1920’s.

     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.

During 1920s known as “The Roaring Twenties” was the time when America was over dependent on production, automobiles, etc were the leading industry, there was divided line between rich and poor. 60% of the population was living below poverty levels. There was uneven distribution of wealth, 6% of the wealthiest people in the country were getting most of American income and, 33% of the income and richest, 1% owned half of the nation’s wealth. While the united states were doing extremely well during the 1920s, most of europe is still dealing with the devastation of World War I. America soon become a superpower world bank and, europe started borrowing and buying less of American products. While there was a

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