The Effects of the Stock Market Crash of 1929

The United States entered one of the most devastating economic periods in its history after the stock market crash of 1929. The massive damage done to the quality of life of the average American during this time, known as the Great Depression, prompted a fundamental change in the attitude of the nation. The most notable change was a shift in public belief about what type of President would best serve the struggling nation. The election of Franklin D. Roosevelt completely reversed the trend of Presidents that pursued policies focused around benefitting businesses and the wealthy. Whereas leaders before him held fast in their support of big businesses, even to the point of ignoring the harm they had brought to the country, Roosevelt focused his

The stock market crash of 1929, additionally called the Great Crash, was a sharp decrease in U.S. stock exchange values in 1929 that added to the Great Depression of the 1930s. The market accident was a consequence of various economic imbalances and structural failings (Pettinger). In the 1920s, there was a fast development in bank credit and advances. Energized by the quality of the economy, individuals felt the share

In the 1920s there was a trend of consumption by the American people, many citizens bought stocks and luxury items on credit rather than cash. This took a terrible turn in 1929 when the stock market crashed on October 29th. This was one of the major events that led to The Great Depression. The Great Depression was also caused by speculation and installment buying, income maldistribution, and overproduction. Each of these topics created serious problems for the economy that ended with debt, unemployment, and poverty.

As a result of the German reparations, the US decided to give them monetary assistance, paying large sums of money to the German government on a loan. When the US stock market crashed, investors began drawing money from the loans to Germany, causing the Great Depression to spread to Germany and Europe.

The 1929 Stock Market Crash "We’d like to thank you, Herbert Hoover/ For really showing us the way/ You dirty rat, you Bureaucrat, you/ Made us what we are today (www.stlyrics.com)." These lyrics from the musical Annie place the blame for the 1929 Stock Market Crash solely on the then former president Herbert Hoover. The truth of the matter is that placing the blame for the Stock Market Crash on Mr. Hoover is very unfair. Herbert Hoover was only one of many causes of the Stock Market Crash. It is easy to try to place the blame for one of the most destructive events in the history of the American economy on one person, but the real causes lie in the rampant speculation, the lack of regulation of the stock market, and the questionable ethics of many of the companies and brokers that were involved in the market. Although the 1929 Stock Market Crash is generally blamed on a few scapegoats, it was actually caused by a multitude of factors, which makes finding a scapegoat impossible.

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.

During the 1930s. the United States faced one of the greatest economic depressions in history, known as the Great Depression. Since many people essentially manipulated the stock market to their advantage, they eventually got richer. However, on October 29,1929, the stock market crashed since so many people wanted to sell their stocks but so few people wanted to buy these products, which caused prices to collapse. This led up to issues such as banking crisis, where banks who invested so heavily on the stock market lost so much money. In fact, people who deposited money lose everything they had. In addition, factories that has overproduced goods had also lost tons of money since businesses were producing far more goods than people were consuming. All these events that led to the Great Depression. Although Franklin D. Roosevelt came into office in 1933 and released his plans known as the New Deal which were essentially government programs that provided aid to Americans, it did not change the fact that the economy was still largely suffering. Meanwhile, tensions in Europe also increased as European countries were devastated from the hard times occurring in their nation. Following totalitarianism as a political system, many European countries were led by dictators. One of the most important dictator, was German leader Adolph Hitler. Germany, who had lost a lot power and land, after the loss in World War I and the

Before World War I, the United States was in a period of isolationism, and a determination to stay out of European wars and affairs, while trying to maintain its status as one of the world’s biggest superpowers, militarily and economically (“United States Before”). America was just exiting the Gilded Age, which was an important time of growth and prosperity. Despite this, the American economy was in a small recession when entering the war, which was reversed by a 44 month period of growth caused by production for the war (NBER). This 44 month period helped the economy expand, and furthered the strength of the country. It also furthered the confidence of American businesses and the government which contributed to the attitude that caused overconfidence and helped to spread the Great Depression.

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.

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.

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.

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

The stock market crash of 1929 directly caused the Great Depression; however, many factors contributed to the fall. No one factor of combination of factors can be said to be the predominant cause of the stock market crash. Economics is not an exact science. It contains plenty of room for fluctuation (Nardo 36). The public was quick to blame the government. Herbert Hoover, President during the stock market crash, offered three main explanations for the crash: a slump in stock speculations, economics outside the United States of America, and World War I. The World War I theory was widely criticized and Senator Carter Glass thought it was no more the cause of the crash than the “war of the Phoenicians or the conquest of Gaul by Caesar.” (Nardo 36). The excuse that it was out of the United States’ control might have been accurate though. While the Great Depression was a global event, not all countries entered it at the same time. Eight countries - Canada, Argentine, Brazil, Germany, Finland, Poland, Australia, and the Netherlands Indies – entered the depression before the USA. However, nearly twice that number

After the Great War (1914-1919) came the “Roaring Twenties” followed by the Great Depression (1929-1939). After World War I America experienced the greatest economic growth in its history. Its economic expansion was due to how undamaged it was after the war. It became the richest country in the world at that time. The people enjoyed life as it were back then until the US experienced the largest economic downturn in history when the Stock Market crashed on 29th October 1929. It began in the summer months of 1929 when the US economy began experiencing a small recession where consumers began spending less and unsold goods began piling up, thereby slowing down production. While this was happening stock prices continues to rise reaching levels that could not be justified by anticipated potential earnings. This occurred for a few months until October 24th 1929 when the stock market crashed and America faced the Great Depression a few days after on October 29th 1929 . So what were the contributing factors of the Great Depression? These include:

World War I also effected the economy of United States and the World economy. Stock market crashed in October 1929 in United States, and it marked the beginning of the great depression. Thousands of banks and businesses failed during this time. Agricultural production fell, and unemployment rose quickly. Unemployment commonly exceeded twenty five percent. In 1933 one out of every four American workers was out of a job. Since World War I effected the economies of almost all the countries, the world trade fell off and countries turned to nationalist economic policies that only provoked the problem. Prices of everything were so high that money sometimes was more useful to burn than to spend. Counties had over 280, 000 million dollars in expense during war. The costs of World War I was too big to pay for the world, and the economy of almost all the countries fell down.