What Caused The Great Depression Essay

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

The United States began as a hardworking agricultural country. It seemingly led up to what felt like the best years of America, the 1920’s. Widely known as the roaring 20’s were when the industrial and stock market boomed. However too much of a good thing can only end badly, and the 20’s were no exception. On October 29, 1929, better known as “Black Tuesday”, the stock market crashed and America was flipped upside down.

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.

It is known by many, that the falling and crashing of the stock market, is what marked the beginning of The Great Depression. By definition, The Great Depression was a period of time lasting from 1929 until 1941, during which time, the economy had fallen and unemployment had spread across the United States like wildfire. However, the crashing of the stock market is not what actually started the depression itself. After the crash of the stock market, it sparked a chain of events that led to the slow collapse of the United States economy.

     The Great Depression was a huge economic downfall in North America and involved many other industrialized countries of the world. The Depression began in 1929 and lasted for about ten years. Millions of people lost their jobs along with many businesses going bankrupt. The common misconception of the Great Depression is people think that the stock market crash was the main cause for it. There were many causes for the Depression; unequal distribution of money during the 1920’s was the main cause of the Depression. This unequal distribution happened on many different classes of people. The imbalance of money is what created such an unstable economy. The stock market was doing much worse than people thought

It is said that the cause of the catastrophic stock market crash known as the great depression was due mostly to uncontrolled political and industrial systems otherwise known as capitalism. However, the timeline leading up to the Great Depression proves that many other factors played a role in the stock market crash that occurred in the decade of the 1930's. So lets take a look at rather four, factors contributing to the great depression that we will further discuss in the following paragraphs. Four of the main causes that led up to the great depression were unequal distribution of wealth, uncontrolled political and industrial systems, high tariffs and war debts.

The Great Depression of 1925 lasted until about 1939, was the worst, longest and more severe economic depression in the history of United States of America. The depression caused a great harm to Americans because some of the banks were closed and some people also lost their jobs. Although it originated from United States, The Great Depression caused a huge decline in outputs and acute deflation nearly to every part of the world. Some of the causes include bank failures, reduction in purchasing across the Board, drought conditions and other as listed below.

The Great Depression was caused by the Stock Market crash also known as Black Tuesday, on this day the stock market crashed by seventy five percent. During this time many people took out loans and payed with stocks with credit so they could get rich quick, but when the stocks dropped this low people lost lots of money. This also ruined banks because the people went to the banks to get their money back and the banks didn't have it. In the movie “Cinderella Man” James says how he lost a lot of money in the stocks because he put it all in one stock and it never grew and he lost his money. Another reason The Great Depression was started was because of people trying to live up to the standard of living. This means people would buy things to make

The Great Depression was an economic recession that began on October 29, 1929, following the crash of the U.S. stock market. The Great depression started in the US but had quickly spread to Canada. Although the market crashing is a factor of the depression it is not the main cause of the depression in Canada. Protectionism, reparation, overproduction of goods, and price of wheat fell, is what started the Great Depression in Canada. The price of wheat had greatly fallen.

The Great Depression encompassed many years of frustration and confusion.Not only have numerous historians delved into the causes without narrowing them down, but economists have, also. Notoriously, the stock market crash, in 1929, has taken the blame, or been the brunt of precipitating the depression. In fact, the stock market crash was only a contributing factor in the United States of America.

First off, "Stock prices went up a ton and everyone who believed that investing in the stock market was a risky

While the United States was struggling to emerge from the Great Depression at the end of the 1930s, and would do so partly because of the World War I, Japan was also in a bad economic position. Several things contributed to this; The Great Kanto Earthquake that hit in 1923 had destroyed Tokyo and Yokohama and the areas that surrounded them. Also, the Great Depression, which occurred in the 1930s, worsened Japan's already poor economic state. Another facet of Japan's economy was its reliance on silk exports and during the Great Depression, the price of silk dropped dramatically.   One of the outcomes of Japan's poor economy was the militarization of the government.

A cause of the Great Depression is buying on the margin. Buying on the margin is the purchase of an asset by paying the margin and borrowing the balance from a bank or broker. During the 1920s more people than ever before had invested in the stock market. At the end of the decade, stock prices rose so fast that people became instantly rich. The prices were going up so the system kept working. Then, in 1928 and 1929, the prices of many stocks went up faster than the value of the companies the stocks represented, causing the stock market to crash. This led to the Great Depression.

There are several major causes that led to the severity of the Great Depression. For one, the Stock Market Crash of October 29, 1929 made a monumental impact on the economy of the United States and led them into a time of depression. The Stock Market Crash began on October 24, on a Tuesday where prices suddenly made a dramatic decline. This decline took billions of dollars away from individuals and sudden panic began to reverberate through America. With the stock prices being nearly invisible and no sellers to buy these stocks, bankers began to make up a plan. They invested $20 million dollars in stocks to increase the prices and many other bankers began to follow suite, semi-easing the mind of the public (Norton, 2015). However, on the 29th of October, prices plummeted again and the stock market crashed. This led to millions upon millions of dollars being wiped out and many individuals and business owners saw the effect of this crash. Multiple banks failed and caused people to lose their money. To prevent this, people ran to the banks to withdraw their money from their account, which ultimately proved more harm than good because more than 9,000 banks failed (Kelly, 2017). Filled with panic, these people were unsure of what the economic status of the United States would be and proved to become stingy in their lending and spending of it. This aspect of less demand from society caused a ripple effect as businesses closed, laid off workers, and poverty and unemployment greatly

Historians still debate over this matter, for example The Economist wrote in an article 1998 that the Depression did not start with the stock market crash. Nor that it was clear at the time of the crash that a depression was starting. According to Milton Friedman, what finally plunged the country into the Great Depression was the collapse of the banking system, caused by the unpaid loans taken by speculators. According to this theory the great depression was the aftermath of a chain reaction that started by inexperienced investors. The banks loaned money to speculators as well as invested in the stock market themselves. When the stock market crashed the speculators couldn't pay back their loans and banks went out of business, causing many people with money in the banks to lose their