Essay on The Causes of the Great Depression

697 Words Apr 17th, 2011 3 Pages
The Causes of The Great Depression
History

Imagine waking up one morning, only to find out that all your investments and savings are gone. So if your bank that you invested all your money in collapsed, you didn’t get any money back. This is what happened to millions of Americans during the 1930s. This era was called the great depression. The great depression was one of the worst economy issues we have ever had in history. It was a hard time for everyone. The great depression started in 1929 till 1939. Tons of banks closed down and about 9 million savings accounts were lost. Tons of companies and factories went under. About 15 million people were unemployed. There are many causes of the great depression. One main cause was the
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It got so bad due to a misunderstanding of a slump by American policymakers. This became a problem. 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. Tons of people saw the stocks falling, literally. People were trying to hurry and get rid of their stocks they bought to try and save some of their money. When more and more people were getting rid of their stocks it just made the situation worst. J.P. Morgan tried to save the economy by putting billions of dollars in certain banks. This became the stock market crash. This day, October 24, 1929, became known as Black Tuesday. In the crash, people lost ten times as much as they put in. After all that everyone lost there trust in the economy. Many people wanted to take their money out of the bank. Banks were running out of money. Because of the cash shortage many banks got closed down. Now all the companies are having troubles. With the economy falling companies couldn’t pay their loans off. Many companies had to combine together in order to cover their loans. Companies stopped hiring people and began to lay off people. Because nobody could afford to hire anyone the unemployment rate got extremely high. Prices also rose by companies to try and make some profit off the
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