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The Causes of the Great Depression

Powerful Essays
It was December 31, 1928, and financial leaders everywhere celebrated what had been a decade of prosperity and boundless optimism. They thought the party would last forever. They called it the new era. In 1929, all the hope and promise and the illusions of the 1920’s changed that. This was the first time many ordinary people were able to buy stock and they were interested in the stock market. A stock is a share of a company bought and sold at the floor of the stock exchange. Also, during the 1920’s, credit was introduced and the stock market was booming. What caused the worst depression in history? What events led up to the economic failure? Was the government aware that the crash was coming? Traditionally, President Roosevelt has been lauded as a savior of the economy and one of the greatest presidents the United States have had. However, there is another way to look at the causes of the Great Depression.

The stock themselves have no fixed value as in a action block if the stock is in demand the price goes up, no demand the price goes down. For almost eight straight years stocks had been rising by 1929 their seem to be no upper limits in this world of paper, numbers and dreams. For example it was a arena of unbound opportunity where some one like my great grand father could come in the arena of the stock exchange a make a fortune. So many people made so much money people thought they could never go wrong buying stock in America companies. This was a whole new way to make a fortune Unlike the Rockefellers and Carnegies of previous decades who built steel mills and dig oil wells.
Man like Jesse Livermore, Michael Meehan, Charles E. Mitchell, had came into their fortune buying and selling stock pieces of paper. American was fa...

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...sh, which led to the Great Depression of 1929. Consumers did not protect themselves, as a majority of them thought that taking big bank loans was safe. (Scaliger egot Americans defaulted because of the lack of money being circulated. Deflation was a huge factor that drove America into the Great Depression.
There were many factors that caused the Great Depression from the banks creating IOU’s to deflation. This economic crash was due to the capitalist system of the United States Federal Reserve on top of the many band-aids that were implemented. Before the 1920’s, the average worker could not borrow money. By 1929, the buy now and pay later concept was a way of life. This way helped generate the downfall of the economy; average hard-working individuals borrowing money that could not be repaid due to jobless and the mismanagement of money from the banking system.
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