The Great Depression Essay

Imagine this. You wake up one morning in the year 1929, in your luxurious, pricey mansion. You then make your way downstairs to eat that nice big breakfast. Then you kiss your family good bye and head off to your fancy job. You come home that evening and suddenly you’re flat broke. Meaning all your money and life’s savings vanished. Unreal right? Well it was real for hundreds of families on October 29, 1929. The day the stock market crashed and when America’s confidence was challenged greatly.

A) The first reason that caused the Great Depression were the consequences of WW1. The Versailes Treaty caused bitterness throughout Europe and it didn’t really resolve much. The U.S. went in great debt from allied loans to other countries. The second cause was the Smoot-Hawley Tariff act. It made the highest tariff that the U.S. has ever had. It also damaged out economy. The final cause was the bad performance of the Federal Reserve.

The economy also changed drastically during the Roaring 20’s. The Boom Cycle was the first reason the economy changed in the early 1920s. WWI had just recently ended in 1918, so this meant that American companies could once again begin building materials to sell, and not just to benefit the war. Soldiers were also coming back home from overseas, and these thousands of men would need jobs. As shown in Document 1, this resulted in a Boom Cycle. The Boom Cycle consists of increased employment leading to increased profits, this resulted in increased purchasing power. Increased purchasing power lead to an increased demand for goods, meaning companies increased production, which resulted in increased sales, and finally completing the cycle, as increased sales led to increased employment. Because of this boom cycle, the American economy was extremely prosperous in the early 1920s. There was one downside to this increased economy, however. The 1920s generation grew up in this prosperous economy, and the older generation saw them as being spoiled. This idea of the 1920s generation being “spoiled” coincides with the flapper movement, as women began wearing more expensive clothing and jewelry. As seen in Document 9, the older generation felt like the 1920s generation didn’t appreciate hard work, or anything that they had in life, and they believed that the new generation wanted more than they needed or deserved. This sense of greed and materialism led people to want to make even more money, so when they heard of the great success people were having in the stock market, thousands of people began to also put money into the stock market. Document 2A states that the average American could make $20,000 to $30,000 overnight by simply investing in the stock market. However, like most good things, this economic prosperity came to a crashing fall. In 1929, the American economy

The prosperity of the 1920’s came to an abrupt halt when the stock market crashed in 1929. The cause of the Great Depression was triggered by a combination of reasons. Americans had been assured in their faith of a booming economy that they bought numerous items on credit. Ultimately the amount of products bought on credit reached an astounding $7 billion(4). With easy access to credit due to the government’s low interest rates, people had bought all of the new automobiles and radios without actually having the finances to pay for them. Beyond that, billions were poured into the stock market to make quick profit, which caused problems because it inflated the stocks to where they were selling for more than they were essentially worth. As if the stock market was not unstable enough, margin buying added to the danger of the stock market collapse because people were purchasing stocks with borrowed money. When the stock market collapsed, brokers demanded but were unable

The 1920s was one of the most impactful eras of the United States. Roles changed, money was plentiful and countless technological advances occur with excited everyone across the nation. A multitude of people believed it would be never ending, an endless celebration due to the end of a World War 1. Unfortunately, in 1929, the stock market had crashed. That event would be the first domino to fall and would continue to impact the country's economy. Eventually, it would result in massive unemployment, a halt in manufacturing and a great loss of money. American would enter a new dreadful time period known as the Great Depression.

The United States experienced times of prosperity during the the 1920s, resulting in successful numbers in the stock market. This all came to an abrupt stop on October 29, 1929 when an abundant amount of investors pulled out of the market, resulting in the stock market crash. This left millions of people in a panic over the declining rate of the American economy. The economy for some time had already been experiencing troubles, before the crash. The United States had a very unequal

The Great Depression was started because inequality was prevalent in the 1920’s. Most people did not participate in the economic 1920’s boom, because a lot of worker’s wages were too low for them to afford it. Immigrants, outsiders, wealthy/greedy people all contributed to The Great Depression.

To start, there were several causes of the Great Depression such as overproduction and the uneven distribution of wealth. However the major cause of the depression was the crash of the stock market in 1929. Once the market crashed Americans went into a panic. Millions of dollars worth of stock gone in the matter of seconds.With millions of Americans panicking and worried about their money they took all of their savings out of banks in fear of the banks crashing and losing their money in order to

The 1920’s, also known as the Roaring Twenties, were fantastic times for the economy. People were buying extravagant things such as automobiles, and investing in the stock market in

History has shown us again, and again that when power is left unchecked it becomes corrupt and out of control, that is the iron law of oligarchy. In the US we saw this happen recently in the 2008 economic meltdown. The banks and corporations should never have been aloud to become "to big to fail," and once they did grow to a point when they were there should have been more government oversight to make sure things did not get out of hand. After the great depression laws were put in place to try to prevent something like that from ever happening again, but we undid those restrictions and ended up in a place eerily similar to somewhere we had been before. In this paper I will cover a brief history of the great depression, and show how the situation in 2008 was all too similar. I will also discuss and analyze the factors that brought us to the tipping point in our most recent economic scare. And finally I will explain why the actions taken by the FED were necessary and kept us from an even more

<br>Stock prices had been rising steadily since 1921, but in 1928 and 1929 they surged forward, with the average price of stocks rising over 40 percent. The stock market was totally unregulated. Margin buying in particular proceeded at a feverish pace as customers borrowed up to 75 percent of the purchase price of stocks. That easy credit lured more speculators and less creditworthy investors

By 1929 70 percent of the nation’s families did not earn enough for a good standard of living. Stocks are bought and sold in a stock market. A share of stock is a share of ownership in a company. The stock market rose sharply as business boomed. The value of stocks sold on stock market increased by four times between the years 1920 and 1929. Ordinary Americans started to buy stocks. There were many new goods that were introduced in the 1920s, people often started to buy them on credit. By the end of the 1920s, people had used up their credit. Spending dropped sharply, and warehouses filled with products that no one could afford to buy. Banks lost a lot of their money, many banks failed as a result of the crash. People who had money in the banks

The first reason is, of course, the stock market crash of 1929. The 1920’s is considered one of the best years in America’s economy. In 1925, the total value of the New York Stock exchange was $27 billion. Four years later, that number skyrocketed up to $87 billion, more than tripling the average stockholder's portfolio. However, on October 29, 1929, also known as Black Thursday, investors were selling their stocks for progressively less and less throughout the day, if they were even able to sell any at

Various factors began revealing the hidden structural problems of the 1920s. For one, overproduction became a major problem, as efficiently supplied goods outstripped their demand. Other problems included income inequality, with only 1% of the population wealthy enough to invest in stocks. This income gap widened over time; by 1929 the stock market was many times its value in 1921. Furthermore, easy credit led to growing debt of consumers and companies. Specifically, people bought stocks on margin while companies took on loans to expand their production. Therefore, many banks in the U.S grew from small to medium sized, as their loan portfolios increased. The first sign of trouble in the 1920s was when several rural banks failed, due to farmers’ failure on agricultural loans, combined with weak reserve requirements. This developed into a major problem because there was no lender of last resort addressing the needs of the failing banks. In addition, investors drove up stock prices even with low earnings per share, in part based on companies’ unrealistic

The stock market grew in the 1920s and developed rapidly. The market, as a stock exchange, because people could make much money by investing in it. To some extent, because people could pay goods on credit, it was easier to borrow money to invest in the stock market. In the 1920s, American economy was booming and developed increasingly. The stock prices kept up with businesses’ growing profits. There were many reasons why people wanted to earn much money. The worldwide speculation was growing rapidly in the late 1920s. As the stock prices higher and higher, the inflation was due to burst. In addition, when banks started to loan money to stock-buyers, the crisis broke out. On October,29,1929, the stock market was influenced by the inflation, over 16 million stocks sold in a flash and the losses exceeded $26 billion. By the end of 1930, the illusory prosperity became a bubble eventually. Although the stock market tried to regain some losses, it was not a solution to face with this crisis. Because of this crisis and the loss of confidence in stocks, people decided not to save money in the bank and forced the banks to withdraw their savings. During the Great Depression, about 9000 banks closed their doors. That was to say a large amount of money disappeared from the economy. Finally, America entered what is called the Great