Essay about Basic Cause Of The Great Depression

Essay about Basic Cause Of The Great Depression

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Basic Causes of the Great Depression

The Great Depression was the longest American slump in the economy to ever occur. The Great Depression lasted for about a decade between 1929 and 1939, the dates of the Stock Market Crash of 1929 and the starting of World War II. A number of factors actually caused the Great Depression. One commonly known factor said to have caused the Great Depression is the Stock Market Crash of 1929, although this is not directly correct. The market crash was only a symptom of, as well as a transition into, the Great Depression. Other symptoms and causes includes, wealth inequality, overproduction, stock speculation, excess loaning, deflation, unemployment, and no profits.

Throughout the roaring 1920s there was always wealth inequality between the rich and the poor. It was a lot like the poor could not do anything about their situation because they had no money and had no regulation or power, and the were able to work things in their favor because they had money, they had control. The extremely wealthy class, less than one percent of the population at that time, had a combined income of about forty two percent worth of all the incomes in the United States. This same amount of people controlled thirty four percent of all bank savings, while the poor did not have any at all. This giant breach between the financial situation between the rich and the poor was mostly caused by low wages. The number of workers hired and production increased heavily between 1923 and 1929, however, the wages of workers did not meet that increase at all.

Overproduction was a big problem in both industrial manufacturing, as well as agriculture. Farmers began to produce way more food than what people were consuming. The ex...

... middle of paper ...

... reached over twenty percent, and more than 11 million people were looking for a job.

There are many factors that played a part of actuating the Great Depression. One of these factors was wealth and income inequality. There was a large financial gap between the rich and the poor. This gap was mostly caused by the inequality in wages. Poor workers got payed at very low rates, while rich workers got payed at higher rates, mainly because they got the privilege of having better paying jobs. Overproduction was also a large issue because it caused more supply than there was demand, which results in a surplus of products. The Stock Market Crash of 1929 was only a symptom of the Great Depression, however, it incited other issues such as, the closing of many banks in the nation, debt, poverty among most people, decline in the production of goods, and unemployment.

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