The Relationship of The Wall Street Crash and The Great Depression In this essay I will be explaining the causes of the Great Depression The Wall Street Crash was the drop in share prices in 1929.The Great Depression was the period in the 1930’s when the USA and other countries like Germany suffered a great deal of poverty i.e. hunger, unemployment, homelessness. Throughout this essay it will be explained how the Wall Street crash was a cause of the Great Depression but it was not the only cause as there were many other factors that also led to the Great Depression. I think the next long term cause was of the Great Depression was the inequality between the rich and the poor. This was a long-term cause because there was inequality between the rich and the poor from the start and the poor were already in depression long before the crash. This also happened because the government did not tax the rich much this meant that there were no rules to help the poor i.e. the farmers until 1919 they were fairly prosperous but during the 1920s boom they faced ruin. They were overproducing as they had all this new machinery allow them to produce a lot more but all this extra food went to waste as supply was exceeding demand. As result of these surplus goods the farmers had to drop food prices to sell it and this meant income was getting lower and lower. The other reason connected to the farmers overproducing was the fact that World War 1 had ended which meant they had to stop selling their produce to European countries as the soldiers had gone back home and would be producing their own goods, because during the First World War the Europe... ... middle of paper ... ...em they did not get back what they had invested therefore they lost a lot of money as the value of the shares was not worth a lot now. So they would sell their shares for less money then they had originally invested in the stock market therefore this created poverty, which led to the Great Depression. The other problem was the banks did not have enough money to help the businesses that were in trouble. This was because they had lent too much money to everybody that they did not have enough left in the banks themselves. Because the banks did have the money to lend out they started to ask the people they had loaned the money to back, because the people did not have the money and therefore could not give it back the banks took the property of the people which left them homeless this was how their debt got paid back.
The fundamental weakness and contradictions of the world economy was the actual cause of the Great Depression. The international economy was in shambles because of the cost of war and the American economy was indirectly damaged by this; however, October 29, 1929 is the official beginning of the Great Depression because of the stock market crash of 1929. Paper fortunes had vanished but money was the foundation of American life. People usually took loans from banks so they could start businesses but because of the Depression, they took out loans so they would have e...
There were many causes for the Great Depression. The first and one of the largest was the stock market crash. Before 1929 the stock market was flourishing and everyone wanted to buy stocks. People were so confident in the stock market that they were buying “on margin”, which meant that brokers would lend them 10% of the money they invested (D1). The problems began when stocks were being over speculated. When people began to realize this, they began selling there shares. On October 29, 1929, 16 million shares were sold (D9). This day became known as “Black Thursday”, the day the stock market crashed (D12). The second reason was the overproduction of goods. Factories had already produced too many goods and now there was no demand for them. The government began to raise tariffs to protect Canadian industries but things only led downhill from there.
Some say that the great depression was caused partially by social democracy and planned economies. And although this could be true, it originally started from debts from World War I, and of course the stock market crashing in 1929.
The housing crisis in America is a major problem plaguing the United States' economy. Before a solution is formulated, one must consider the history of the market and the causes of the problem. And after a solution is formulated, one must present an idea for prevention of the problem for the future.
One main cause for the Great Depression, is that there was extreme unemployment percentages. The highest reaching nearly 25% in 1933. One place, and people were specifically hit the hardest during the Depression, were the coal miners in Kentucky. “There were whole towns whose people had not a cent of income” (Doc.B). Many people had no way of making any income what so ever, and would have to revert to killing pets and other animals for a source of food. “Children were reported so famished they were chewing up their own hands. (Doc. B) Even in much bigger cities, like New York, there would be lines of hundreds to thousands of people, just standing, waiting to get a few pieces of bread, and water. Millions of Americans could no afford a place to live and had to create and live in Hoovervilles so much of the depression. (Doc A).
n the history of the United States The Great Depression was the most detrimental economic depression to ever happen. It lasted from 1929 to 1939. There were many things that caused the Great Depression. Historians and Economist believe the stock market crash was one of the first causes that lead to the Great Depression. The stock market had just reached record highs the summer of 1929, but had started to decline in September. On October 24th, the stock market plunged and five days later it crashed. Many people were in a panic. The value was lost by 12 percent and wiping out $14 billion of investments. With in only 2 more months, more than $40 billion dollars were lost by stockholders. The economy was destroyed and America entered into the
The occurrence of the Great Depression was an inevitable economic disaster that was caused by a variety of reasons and events that happened in the U.S. and across the world. The lack of diversification was one of the main causes of the Great Depression as the dependence on only certain industries like the automobile industry began years before; and because of the prolonged success of such industries, their demise could not have been predicted. World War I was an event that had a major impact on the Great Depression because of the complexity of the international debt owed to the U.S, and the decline of international trade. In addition, the failure of the bank system and the reckless investments that banks, businesses and the American public made contributed to the manifestation of the Great Depression.
The Great Depression was in no way the only depression the country has ever seen, but it was one of the worst economic downfalls in the United States. As for North America and the United States, the Great Depression was the worst it had ever seen. In addition to North America, the Depression greatly affected Europe and other various countries throughout the world significantly during the 1920’s and 1930’s. The Great Depression was caused by the collapse of the Stock Market, which happened in October of 1929. The crash exhausted about forty percent of the paper values of common stocks. It was the worst depression due to the fact that at the time of the Great Depression the government involvement in the economy was higher than it had ever been. A unique government agency had been set up exclusively to prevent depressions and their related troubles for instance bank panics. All of ...
Great Depression was one of the most severe economic situation the world had ever seen. It all started during late 1929 and lasted till 1939. Although, the origin of depression was United Sattes but with US Economy being highly correlated with global economy, the ill efffects were seen in the whole world with high unemployment, low production and deflation. Overall it was the most severe depression ever faced by western industrialized world. Stock Market Crashes, Bank Failures and a lot more, left the governments ineffective and this lead the global economy to what we call today- ‘’Great Depression’’.(Rockoff). As for the cause and what lead to Great Depression, the issue is still in debate among eminent economists, but the crux provides evidence that the worst ever depression ever expereinced by Global Economy stemed from multiple causes which are as follows:
If the Great depression did not happen in the united states then world war ll would have been much more reason in doing so. World war ll was one of
The Great Depression is known as the most economically catastrophic time period in United States history. During this period, no worker was left unaffected: millions lost their jobs, and people who managed to hold on faced hour and pay cuts. There is debate over what the true cause of the Depression is, but one thing is certain. American political leaders of the 1920s were not responsible for the Great Depression because the primary factors behind it: the ending of World War I, unfair distribution of wealth, and the Great Crash, were out of the hands of the government.
The Great Depression is known to be the most worldwide depression of the entire twentieth century. It is well known and still studied today in history. The Great Depression was cause when the stock market crashed in the late 1920s. Before the Great Depression everything appeared to be going well and poverty was at a high in the twenties in which was referred to the roaring twenties. The Great Depression started on October 29, 1929, which is the day the stock market collapsed. This day is referred to as Black Tuesday. To the horrors of many people, this Depression lasted a full decade shocking everyone on how a once stabile economy can go from prosperity to nothing overnight. People have attributed the Great Depression as
The most significant cause of the Great Depression was overproduction in the 1920’s. Factories and farms were producing more than people could buy. From that prices fell, factories closed, and workers were laid off. When prices fell, the economy started to collapse. Fewer places to work also created a small number of workers to produce money. In 1930, the unemployment rate for non-farm workers was 14.2% and it rose even more in 1933 at a rate of 37.6%. Over-production had a ripple effect towards America’s economy. The act of overproduction during the 1920’s was the greatest cause of the Great Depression. Companies were creating too much for people to buy resulting into a under-composition and a lower economy.
The Wall Street Crash and The Great Depression When the stock market collapsed on Wall Street on Tuesday, October 29, 1929, it sent financial markets worldwide into a tailspin with disastrous effects of the sand. The German economy was especially vulnerable since It was built out of foreign capital, mostly loans from America and was dependent on foreign trade. When those loans suddenly came due and when the world market for German exports dried up, the well oiled German industrial machinery quickly ground to a halt. As production levels fell, German workers were laid off. Along with this, banks failed throughout Germany.
Imagine yourself in a situation where you could never eat enough in a day because you weren’t sure there would be a meal waiting for you the next day. Imagine if those considered poor fell from even greater heights and landed in an even deeper pocket of desperation. Imagine if the poorer you were and the hungrier you became. The hunger rendered you weak and with this weakness you began to find it difficult to think clearly and to function properly. Imagine if you needed to find work to support a family, but you could not muster the strength to look for a job because you needed to first find food to get the energy to move. Imagine if riches, power, and even wealth made no difference to your situation, everything could be lost and nothing could be gained. Imagine that despite everything that has happened, a man comes to you, and tells you that all the hardships you have come face to face with have been nothing but temporary inconveniences. He tells you that the difficulties of the disarray are not stronger than you, and you will move onward with your head held up high. Would you believe this man? Now, imagine yourself living during The Great Depression