Satisfactory Essays
1. February 1928, the prices in stocks rose for about a year and a half. Between 1928 and 1929, stock prices increased an average of about 40 percent. The trigger to causing the great depression was the fall of the stock market. Autumn of 1929 there were great declines in stock prices. On October 29, “Black Tuesday” was an attempt to save the market and all efforts failed companies stocks became useless. Although the stock market crashed, the first noticeable sign was in October 1929. Historians believed this depression was significant in history because it lasted very long and was difficult. A factor that was a cause of the depression was lack of diversification. Automobile and construction were companies that were depended on truly by most industries. The construction and automobile industries began to plummet in the late 1920s. Plastic, petroleum, and chemical industries tried to expand the market but they failed because they were not fully developed to pick up the slack. Another factor was the maldistribution of wealth. Consumer demand decreased, and a stable market could not be created. In 1929 although the economy grew, many Americans could not afford to buy merchandises industries were producing. A third factor was that the economy’s credit structure was horrible. Farmer’s crop prices were low and they could not pay off their debt. The small banks that were collaborated with farmers were chronically in the ground because of the loans customers took. Large banks were also in trouble because of investments in stocks or loans. Most of those banks suffered when the stock market crashed. Another problem was the declining in exports. In the 1920s American tariffs began to increase therefore the demand Europeans had for American ... ... middle of paper ... ...ion. It did not work the economy continuously deprecated. Before the crash of the stock market Hoover came up with an Agricultural Marketing Act, the government would help farmers maintain prices instead it stiffened exports on food. Hoovers popularity chronically decrease, there were Americans that blamed Hoover himself for the depression. In 1931 there was an international financial panic. Banks throughout the world were going bankrupt because they relied on American banks to help pay off their debt. In 1932 the Reconstruction Finance Corporation provided loans to troubled businesses. It mainly helped large banks and business which this help soon failed also. Hoover was unsuccessful in stopping the panic because he was using money that the government had to help business and those businesses still did not bring in any profit causing further debt and economic ruin.
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