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
29 Mar. 2014. Bali, Selçuk. “Comparisons between the Long Depression, the Great Depression, and the Global Financial Crisis.” International Journal of Management Economics & Business 8 (16) (2012): 223–243. Web.
The stock market crashing, due to people buying stocks on load, the debts from WWI farmers and consumers in deep debt, and unequal distribution of wealth all contributed to the economy crashing. The Great Depression had a major impact on American history; it affected one of the greatest nations and countries associating with it. The Great Depression distressed society, farmers and the innocent children in more ways than one can imagine. Society is always seen as a judgemental group of individualisms full of ignorance, but the Great Depression brought forth change in their attitudes. President Herbert Hoover was a self-reliant person who believed that in order for our Americans to pull through these desperate times, they needed to rely on themselves and to make the effort to support their families instead of expected government to hold their hands the entire time (Alva, Danzer, Krieger, Wilson, Woloch 479).
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.
The people that were affected the most by the Great Depression were stockholders. Thousands of stockholders lost enormous amounts of money on Black Tuesday. The rapid decrease of stock prices made stockholders lose their money within one day. Even though it was a devastating loss, there was no way to predict it. From 1925 to 1929, the average stock price doubled on the New York Stock exchange, making people invest ludicrous amounts of money in the hope that they would make a hug... ... middle of paper ... ...hange crash of October 1929 and therefore the succeeding depression alerted stockholders to be concerned about their own investments within the stock exchange instead of the data of other people’s investments.
Tens of thousands of migrant farm workers traveled the nation looking for employment. Farming income fell some 50 percent and people went hungry because so much food was produced that production became unprofitable. Many Americans watched their homes and life savings be lost because of the stock market. Confidence in the market was lost and without that confidence investors pulled out and the market collapsed. (4) America's unevenly distributed wealth played a role in the stock market crash and slowed the recovery.
All this extravagance would soon disappear and everything people bought on credit or margin would soon come back to haunt them. October 29, 1929, what would later be known as “Black Tuesday,” was the day that the stock market crashed and The Great Depression started. The stock market prices had continually gone up and up to a point where there was no possible way that businesses were going to make that much in their future earnings. Investors began to sell their stocks in large quantities. Around 16 million shares were sold just on “Black Tuesday”.
Causes of the Great Depression The Great Depression also called Depression of 1929, or Slump of 1929, began in 1929 and lasted until 1939. It was the longest and most severe depression ever experienced by the industrialized world. Though the United States economy had gone into depression six months earlier, the Great Depression may said to have begun with a catastrophic collapse of the stock market prices on the New York Stock Exchange in October 1929 call the Stock Market Crash of 1929. During the next three years stock prices in the United States continued to fall, until by late 1932 the had dropped 20 percent of their value in 1929 (http://www.britannica.com/bcom/eb/article/0/0,5716,38610+1,00.html). More than a half-century after the fact, there is no consensus on that caused the Great Depression.