Causes of the Stock Market Crash of 1929

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Causes of the Stock Market Crash of 1929

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 extensive stock market speculation (which led to a lack of confidence) that took place during the latter part that same decade.

The U.S. economy was booming throughout the “roaring twenties.” The nation’s total realized income rose from $74 billon in 1923 to $89 billion in 1929. However, these profits were not distributed equally among all Americans which lead to the huge disparity in wealth among classes. One example of this discrepancy is Henry Ford whose personal income was $14 million in the same year in which the average personal income was $750. In 1929, the top 0.1% of Americans had a combined income equal to the bottom 42% of Americans. That same top 0.1% controlled 34% of all savings, while 80% of Americans had no savings at all. Disposable income per capita rose 9% from 1920 to 1929; those with an income within the top 1% enjoyed an incredible 75% increase in per capita disposable income. The economy of the 1920s enabled the rich to become richer while the working c...

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...to fail rapidly. To protect the nation’s businesses, the U.S. imposed higher trade barriers so foreigners stopped buying American products. Unemployment grew to five million in 1930, and up to thirteen million in 1932. The country spiraled into disaster, and this disaster became known as the Great Depression.

Works Cited

Gusmorino, Paul Alexander. “Main Causes of the Great Depression.” May 13, 1996. http://www.geocities.com/CapitolHill/Senate/6854/greatdep.html

http://eee.english.uiuc.edu/maps/depression/overview.htm

http://www.amatecon.com/gd/gdtimeline.html

http://history.sandiego.edu/gen/20th/1920s/depression-causes.html

http://www.socialstudieshelp.com/Lesson_83_Notes.htm

http://me.essortment.com/causeofthegre_rbtv.htm

http://www.btinternet.com/~dreklind/threetwo/thecrash.htm

http://www.english.uiuc.edu/maps/depression/about.htm

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