The Stock Market crash caused the Great Depression by making investors and companies losing majority of their money. The stock market crash happened on October 29, 1929 and was caused by the trading and selling of 12.9 million stocks. The Great Depression lasted from 1929 to 1939 and was the worst economic crisis which caused many people to become unemployed, businesses, and banks started to close and fail. Also the depression challenged American people and families by putting them in economic and social issues. Millions of people and families lost their savings and many banks which failed in the duration of the
The value of these properties dropped so much that many home owners lost their down payment and could not pay the mortgage balance. These sellers had to pay c... ... middle of paper ... ... properties bought by people with insufficient funds. To solve the problem, a 20% down payment or higher needs to be required for buyers. Those who are able to supply this large initial payment are more likely to have a history of capable money management and pay off their mortgage loans. For interest-only loans and other “exotic” loans such as adjustable rates and 40-year payment plans, a much stricter home-buyer approval process must be set up.
The fathers are not there and that forces them to live on the streets. So they must resort to prostitution to pay for the food that their young ones need to stay alive. There are many other people that become homeless for many different reasons. Some of these people can not help becoming homeless. Some of these people are the illegal immigrants that come here from other places to get a better life but end up not having enough money to make it in this hard world that we live in.
Then in October that’s when the stock market crash that changed history. The crash sparked a chain reaction. First banks demanded that costumers pay back the money they had to borrow the buy stock. When people could not repay these loans the banks ran short of money. Fearing that banks would close, customers lined up to withdraw their money.
As the housing market fell, the banks no longer offered the refinancing that these borrowers counted on, and other economic issues caused many of them to be on even less firm footing then when they got their mortgages. Foreclosing on homes that are unsellable in a slow market helps no one. Foreclosing on a home is devastating to the owners. They not only loose their home, but their families are uprooted. They are faced with nerve-racking and disconcerting circumstances for everyone in the family, including and especially the children.
One of the mistake is people are going out and getting there dream home that they can not afford . And then people spend too much money on miscellaneous items. As I walk home from school I notice that mostly every house in my neighborhood has at least one brand new car in the drive way. Then I thought to myself if people wasn't so high maintains and not always trying to keep up with the Jones they probably could afford their mortgage and there wouldn't be so many foreclosures. I researched and came up with the hypothesis that no matter how much a person cuts back and saves on their everyday living, if they still go out and buy a home to much out of the budget they would still not be able to save there homes from foreclosure.
They had purchased stock in companies whose shares were now crumbling in value” (Ayers 678). After the stocks crashed, people who were invested in them, lost thousands even millions of dollars. The banks were the top investors so they lost the most amount of money with their invested stocks, along with the frightened depositors withdrawing their savings, draining money quickly from the bank. Hundreds of banks failed and shut down because of their loses. CLOSING STATEMENT: although, … Businesses were also affected by the Stock Market Crash.
These banks could not stay down, at one point they were going to have to be re-opened, but not until they were inspected and made sure that they can stay on their feet. In just one year, 23,000 people committed suicide because they had lost all of their money and possessions; this was a horrific figure and an all time record. The depression changed the living conditions of the majority of the public, food and money wasn’t coming into the households, leaving people hungry and desperate for jobs.
Today, millions of Americans are suffering lost jobs and cut hours because of the recession. Because of this loss, those people cannot afford the monthly bills the bank sends out for mortgages, therefore making people foreclose on their homes. A home is where people live, cook, sleep and sometimes work. If that is taken away, their lives are taken as well. The foreclosure crisis needs to be solved.
What if one day you went to the bank to take out your money and the banks looked at you and said “It’s gone”, how would your behavior change? Now imagine millions of Americans finding out that they had no savings, going home to their families not knowing where their next meal is coming from. I do want to bring the focus back to how America 's cultural and social behaviors changed, and shift away from what caused the depression. I’m not quite sure if adding the cause and effect of the depression will help my research paper or if I should mainly stick to these 2 topics. Although the culture of the American people changed heavily based on the banks collapsing, adding these details will give the reader more depth into how the great depression caused these issues in