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 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.
On October 24th, 1929 one of the most devastating events in American history occurred. Nearly half of America’s banks had failed and over 13 million people were unemployed. As a result of the Stock Market Crash of 1929, America spiraled downward into the Great Depression. Many people believed that Herbert Hoover was to blame for the Depression, because Hoover believed that the government should not do anything to the economy because the economy would eventually fix itself. As a child, Hoover was shy, sensitive, and introverted in response to the loss of his parents, and him and his siblings lived with their aunt and uncle.
After World War I, the price of food began to drop causing some dramatic effects on the United States economy. Americans faced a big impact on the Great Depression that made millions of people lose their jobs and were forced to leave their farm land. Many people, even those who could not afford it, invest all their money in stocks. Some even borrowed money to buy stocks. Prices of farm products fell sharply economic losses were aggravated by a drought.
Hoover plan was to beat poverty; but, he caused more people become poverty-stricken. He became very unpopular amongst the people in the United States. Unsuccessfully, his plan did not work for the betterment of the American people. The Great Depression Causes The causes of the great the Great Depression were over expansion, speculation, bankruptcy and a pattern that has repeated itself through out the United States history. In a five time span Americans salary did not equal to their contributing.
The stock market crash wiped out all of these investors that were involved in the stock market. This day came to be known as Black Thursday. Five days later, a day that is known as Black Tuesday, stock prices dropped to the lowest they have ever been yet. "The stock market lost around ten billion dollars" (The Great Depression, History). The stock market crash was a major problem but it linked to more problems that were to happen.
The Depression was a period of time after the economic boom of the 1920's in America, when the economy went downhill. People lost money, jobs, shares, businusses went bankrupt and the farming industry suffered greatly. The Republic Government at the time lead by Hoover was still following policies of Lassez Faire so business was not getting the support it needed to get it back on track. The Republic Governments Protectionist policies were one of the causes of the great depression. There were trade problems associated with their protectionist policies.
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.
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 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).