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 effects of The Great Depression lasted for many years. The Great Depression started on a day in American and world history that was sindged into our hearts forever; October 29, 1929 (Black Tuesday). The Dow Jones Industrial average on the New York Stock Exchange fell 12% and caused many people to lose their invested money and assets. The Depression was felt worldwide as we saw nearly 35% of all jobs and trade lost during this period of time. At the depression’s peak, the Dow Jones Industrial Average lost 89% of its assets and value.
Once Recession ended the GNP went up 7.9 percent in 1939. (Www.english.uiuc.edu) tells us that besides ruining many thousands of individual investors, this precipitous decline in the value of assets greatly strained banks and other financial institutions, particularly those holding stocks in their portfolios. Many banks were consequently forced into insolvency; by 1933, 11,000 of the United States' 25,000 banks had failed. The failure of so many banks, combined with a general and nationwide loss of confidence in the economy, led to much-reduced levels of spending and demand and hence of production, thus aggravating the downward spiral. “The result was drastically falling output and drastically rising unemployment; ... ... middle of paper ... ...its were contracting it; The Fed's inaction was the reason why the initial recession turned into a prolonged depression; The economy continually sank throughout Hoover's entire term.
The Great Depression was a period of first-time decline in economic movement. It occurred between the years 1929 and 1939. It was the worst and longest economic breakdown in history. The Wall Street stock market crash started the Great Depression; it had terrible effects on the country (United States of America). When the stock market started failing many factories closed production of all types of good.
Another cause to the Great Depression was this newly invented idea of buying on margin, otherwise known as buying on credit. Banks were lending massive amounts of money to people who could not pay the money back. This eventually caused the banks to run out of money and simply fail. Many Americans that bought on credit were forced into foreclosures and repossessions. By 1932, almost 6 million Americans were unemployed and having a hard time finding work.
The phrase “use it up, wear it out, make it do or do without” was used in abounding households during the Great Depression. The Great Depression was the most severe and longest depression experienced by anyone ever. It was a total economic slump that began in North America in 1929. Consumer spending and investment declined, causing industrial output to lessen which led to unemployment. When the Great Depression reached its lowest point, almost half of America’s bank had closed and 13 to 15 million people were unemployed.
New Deal and the end of the Depression The depression was a time that America had not prepared for. The banks had financial difficulties when people lost their borrowed money on the stock market. Unemployment was very high with many businesses losing money through over-production and under-consumption. Therefore many factory workers were put out a job. With 14.5million workers being unemployed in 1933 the factories profits had fallen dramatically.
The effects of the Wall Street Crash were felt all around America as people starved, businesses became bankrupt and unemployment rose. This era was known as the Great Depression and would last for another ten to twenty years. In the short term, rich investors lost great deals of money. Whilst, poorer investors, who had borrowed ‘on the margin’, could not repay their loans and thus became bankrupt. After a while, these incidents began to affect the American public.
The Great Depression was the start to a dreadful economic crisis in the American History. On October 4, 1929 a day that goes by the term “Black Tuesday” the Wall Street stock market collapsed, creating massive unemployment and pain throughout America. Many thought that this depression would only be minor, but they were wrong. This turned into a “major depression”(Who Built America? 392).
The Reasons Behind Roosevelt's The New Deal Franklin Delano Roosevelt came into power in America in 1932. At the time, the American economy collapsed and the USA had entered a long depression. The main reason for the depression was the Wall Street crash, which affected all aspects of American life. The worst problem was unemployment, by 1932; at least 12 million citizens were out of work. As there was no unemployment pay, people had to queue up for soup and bread, sometimes, the queues were 10,000 men long.