The Relationship of The Wall Street Crash and The Great Depression

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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


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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.
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