preview

Stock Market Crash

Satisfactory Essays
The crash of the stock market began in October of 1929. Experts warned that stock prices were overvalued and thousands of investors pulled out of the stock market. By the 24th of that same month panic has begun to set in. With the panic came investors selling all of their stocks which caused stock prices to plummet in the New York Stock Exchange. The stock market crashed on Tuesday the 29th, also known as Black Tuesday. Thousands of people from all walks of life lost their life savings. By the end of the day several financiers had taken their own lives. How did this happen? It was not the stock market crash alone that caused the Great Depression. There were major economic problems such as interdependent economic systems. The governments of Germany and Austria relied on the United States for loans to pay France and England reparations for WWI. Also the French and British governments depended on these reparation payments to pay back the United States for loans taken out during WWI. So it was essentially one big web where if one part of the system was weakened or strained it would affect all of them. Also, there was a huge decline in the demand for cash crops due to technological advancements. One of the greatest defects of the global economy was the recessed state of agriculture. During World War 1 farmers around the world expanded production due to Europe’s decline in agricultural exports. When the war ended Europe’s agricultural activity returned to normal causing worldwide surpluses, causing prices to drop. Along with all of this came layoffs because of the extreme decrease in business activity and wages. A ripple effect was created because a large portion of the world’s economy depended on U.S. exports and capital. On top of all...

... middle of paper ...

...r lost the 1932 election by a landslide to Franklin Roosevelt.
In conclusion, President Hoover downplayed the stock market crash and did not believe in government assistance during the Great Depression. Also he believed the American people could pull the nation out of this depression with hard work and self- reliance. When the depression continued to worsen he interfered with business and approved a destructive tariff. Though Hoover had good intentions when he created the Reconstruction Finance Corporation, it did little to improve or damage the nation’s economy. The Bonus Army situation added to the people’s disdain for President Hoover. This animosity was demonstrated by the names given to Hoovervilles and Hoover blankets. Though Hoover was not the only reason the Great Depression was so devastating, he certainly could have done more to help the American citizens.